In the Classical Model, High Unemployment Due to a Change

question 157

Multiple Choice

In the classical model, high unemployment due to a change in aggregate demand

• A) can persist for an indefinite period of time.
• B) will return to its normal level quickly as wages adjust.
• C) will persist if due to a supply shock but not if due to a demand shock.
• D) never exists because unemployment can never deviate from its normal level.

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Definitions:

Decision Making

The cognitive process of choosing between different courses of action or belief, often involving weighing the benefits and risks.

Cerebral Artery

An artery that supplies blood to the cerebrum, a major part of the brain involved in processing sensory and motor information.

Cerebrum

The largest part of the brain, responsible for higher brain functions such as thought, action, emotion, and sensory processing.

Parietal Lobe

The parietal lobe is one of the four major lobes of the brain, located at the top middle part of the brain and responsible for processing sensory information related to touch, taste, and temperature.