While Much of New Classical Macroeconomics Is Being Refuted by the Evidence

question 116

Multiple Choice

While much of New Classical macroeconomics is being refuted by the evidence, at least one part of it may be a permanent legacy to all economists. It is the insistence on a certain aspect of macroeconomic policy:

• A) it has as much impact on SAS as on AD.
• B) it has its impact on nominal and not real variables.
• C) people will try to anticipate it and then act accordingly.
• D) it has no impact on SAS or AD, but does affect LAS.

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Definitions:

Self-actualized

Attaining one's full talents and capabilities, widely regarded as an innate desire or impulse within all individuals.

Dopamine

A neurotransmitter in the brain that plays a major role in reward-motivated behavior, pleasure, and regulation of movement.

Impulses

Sudden, involuntary urges to act or behave in a certain way, often without forethought.

Ghrelin

A hormone produced in the stomach that stimulates appetite, signaling the brain to increase food intake.