The Classical Model Is the Appropriate Model for Analysis of the Economy

question 286

Multiple Choice

The classical model is the appropriate model for analysis of the economy in the

• A) long run, because evidence indicates that money is not neutral in the long run.
• B) long run, because real and nominal variables are essentially determined separately in the long run.
• C) short run, because money is neutral in the short run.
• D) short run, because real and nominal variables are not highly intertwined in the short run.

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Definitions:

Prefrontal Cortex

The front part of the frontal lobe of the brain, involved in complex behaviors including planning, decision making, moderating social behavior, and expressing personality.

Activation

The process of stimulating an action or behavior; in psychology, it refers to the arousal of the nervous system prompting mental and physical responses.

Delight

A high degree of pleasure or enjoyment; joy.

Parasympathetic Nervous System

The part of the autonomic nervous system that is responsible for conserving energy and promoting relaxation processes.