2. The classical economists assumed A. That the volume of final output is fixed at the...
2. The classical economists assumed A. That the volume of final output is fixed at the full-employment level in the long-run B. The velocity of money is constant C. The velocity of money depends on physical, structural, and institutional factors D. All of the above
Homework Answers
Ans is D
classical economist assumes no unemployment which means full employment output is constant with velocity also constant
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2. The classical economists assumed A. That the volume of final
output is fixed at the...
For each macroeconomic viewpoint, identify whether it is a position held by classical economists, Keynesian economists,...
For each macroeconomic viewpoint, identify whether it is a position held by classical economists, Keynesian economists, or monetarists. If the viewpoint is shared by more than one group, check all that apply. Viewpoints Expansionary fiscal policy is either an unnecessary or ineffective response to a situation where output is below full employment. A decrease in aggregate demand will lead to only a temporary departure from full employment output. Because prices and wages are flexible, the economy will automatically adjust to...
EQUILIBRIUM OUTPUT AND EMPLOYMENT 1. Derive the aggregate supply curve in the classical case. (Draw on the critical...
EQUILIBRIUM OUTPUT AND EMPLOYMENT 1. Derive the aggregate supply curve in the classical case. (Draw on the critical assumptions of classical economists in your explanation). 2. Within the classical model, analyze the following changes to the output equilibrium, price, real wage and employment: (a) decrease in technology (b) influx of foreign workers (c) decrease in money supply. 3. What is the role of money supply in classical theory? If money supply declines, what are the effects on income and price?...
Classical economists believe that O A. short - run fluctuations are too infrequent and mild to...
Classical economists believe that O A. short - run fluctuations are too infrequent and mild to be of much interest OB. it takes a long time for economic variables to reach equilibrium O C. real variables like output and investment are not determined by nominal variables OD. all of the above O E none of the above
Monetarists and classical economists: a. assume that the economy operates at full employment and stimulative monetary...
Monetarists and classical economists: a. assume that the economy operates at full employment and stimulative monetary policy will increase both aggregate supply and aggregate demand. b. assume the economy operates at full employment and stimulative monetary policy will only cause the price level to rise. c. assume that stimulative monetary policy will create high levels of GDP without inflation. d. assume that stimulative monetary policy will create high levels of GDP and slightly high prices.
The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to...
The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to be: a. vertical at the full-employment level of real GDP. b. positively sloped at the full-employment level of real GDP. c. horizontal at the full-employment level of real GDP. d. backward bending at the full-employment level of real GDP.
Which of the following explain how classical economists argued that Say's law holds? Check all that...
Which of the following explain how classical economists argued that Say's law holds? Check all that apply. Although there may be temporary unemployment caused by short periods in which wages and prices adjust, in the long run, aggregate production creates aggregate income that, in turn, allows people to purchase the goods and services being produced. Demand can be forever inadequate for an economy to reach full employment. Markets eliminate persistent shortages and surpluses. Grade It Now Save & Continue Continue...
According to the classical model, an increase in the money supply causes a. output to increase...
According to the classical model, an increase in the money supply causes a. output to increase in the long run. b. the unemployment rate to fall in the long run. c. prices to rise in the long run. d. interest rates to fall in the long run.
Assume that the quantity theory of money holds and that velocity is constant at 5.0. Output...
Assume that the quantity theory of money holds and that velocity is constant at 5.0. Output is fixed at its full-employment value of 10 000, and the price level is 2.0. Determine the real demand for money. The government fixes the nominal money supply at 5000. With output fixed at its fullemployment level and with the assumption that prices are flexible, what will be the new price level? What will be the price level if the government increases the nominal...
9.What is Say’s Law and what do classical economists say about prices, wages, and interest rates?...
9.What is Say’s Law and what do classical economists say about prices, wages, and interest rates? What are the three states of the economy in relating the real GDP to natural real GDP? In a recessionary gap, is there a surplus or a shortage of production? What does that imply about the labor market and how wages may change? Understand the differences between a recessionary gap, inflationary gap, and long run equilibrium. How is the physical production possibilities frontier (PPF)...
Describe the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve. A. the...
Describe the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve. A. the SRAS curve is horizontal and the LRAS curve is upward sloping B. the SRAS curve is horizontal and the LRAS curve is vertical C. the SRAS curve is vertical and the LRAS curve is horizontal D. the SRAS curve is vertical and the LRAS curve is upward sloping Why is the short-run aggregate supply curve horizontal? A. because output is fixed in the short...
For each macroeconomic viewpoint, identify whether it is a position held by classical economists, Keynesian economists, or monetarists. If the viewpoint is shared by more than one group, check all that apply. Viewpoints Expansionary fiscal policy is either an unnecessary or ineffective response to a situation where output is below full employment. A decrease in aggregate demand will lead to only a temporary departure from full employment output. Because prices and wages are flexible, the economy will automatically adjust to...
EQUILIBRIUM OUTPUT AND EMPLOYMENT 1. Derive the aggregate supply curve in the classical case. (Draw on the critical assumptions of classical economists in your explanation). 2. Within the classical model, analyze the following changes to the output equilibrium, price, real wage and employment: (a) decrease in technology (b) influx of foreign workers (c) decrease in money supply. 3. What is the role of money supply in classical theory? If money supply declines, what are the effects on income and price?...
Classical economists believe that O A. short - run fluctuations are too infrequent and mild to be of much interest OB. it takes a long time for economic variables to reach equilibrium O C. real variables like output and investment are not determined by nominal variables OD. all of the above O E none of the above
Which of the following explain how classical economists argued that Say's law holds? Check all that apply. Although there may be temporary unemployment caused by short periods in which wages and prices adjust, in the long run, aggregate production creates aggregate income that, in turn, allows people to purchase the goods and services being produced. Demand can be forever inadequate for an economy to reach full employment. Markets eliminate persistent shortages and surpluses. Grade It Now Save & Continue Continue...
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