According to classical economists: A.wages, prices and interest rates are flexible. B.only nominal wages and prices are flexible. C.the recessionary gaps create a shortage of unemployed workers. D. an inflationary gap creates a surplus of unemployed workers.

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Q: a. What is the difference between actual (nominal) GDP and real GDP?

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Q: Explain the theory of the classical economists that flexible prices and wages ensure that the…

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Q: 23. According to the Neoclassical view, if there is a decline in the demand for labour and no change…

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Q: Justify the statement. TRUE/FALSE Nominal GDP adjusts for the inflation.

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Q: According to the Keynesian and New Keynesian theories; b. Is the employment level that you found…

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A: The natural rate of interest assists the economy at full employment while keeping inflation same.

Q: 6) Classical cconomists believe ill A. Lack of aggregate demand B. Negative supply shocks C. Lack of…

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Q: Suppose the economy is experiencing an inflationary gap. In the long run, if there is no government…

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Q: Which of the following are counter-cyclical indicators in an economy a. Inflation b. Unemployment c.…

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Q: If the unemployment rate is 7.5% and the inflation is 0.5%, what would a Keynesian economist…

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Q: 6. Using the labor market, production function. and AS/AD graphs of the classical model, show the…

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Q: Stagflation occurs when there is in unemployment and in inflation. This occurs graphically as a

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Q: Consider the following statements about the business cycle.   Which of the following statements is…

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Q: Unanticipated inflation erodes the purchasing power of money. ___________ is hurt least by…

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Q: John Maynard Keynes fundamentally disagreed with Adam Smith in that according to Keynesian Theory:…

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Q: Liberals think that unemployment is underestimated because of _____________________. Conservatives…

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Q: Is fiscal policy, say an increase in government expenditures (G), effective according to the Real…

A: The following problem has been solved as follows:

Q: 35) We depart from the assumptions of classical economics when we focus on the relationship between…

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Q: Interest rates can be expressed in real or nominal terms. Which of the following is most correct?…

A: Inflation refers to a rise in the general prices of goods and services.

Q: An economy is at full employment. Which of the following can create an inflationary gap. Group of…

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Q: In a classical economy, citizens begin to expect lower prices five years in the future. As a result,…

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Q: Select all that apply to the classical view of economics: A. Assumes flexible price and wages B.…

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