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.

There are five mainstream schools of economic thinking on issues There are five mainstream schools of economic thinking on issues relating to what government can or cannot do with respect to stabilizing the economy. What are these schools and how do they differ on issues concerning unemployment and inflation? There are five mainstream schools of economic thinking on issues

Suppose the economy is experiencing a recessionary gap. In the long run, if there is no government intervention, the nominal wages will ______, unemployment will _____, and the price level will _______. A.fall; rise; fall B.fall; fall; fall C.rise; fall; rise D.rise; rise; rise

Under the classical dichotomy, which of the following does not determine real GDP in the long run? The investment rate The aggregate price level TFP New ideas.

1. Currently the prime interest rate, which is the interest rate given to customers with the best credit, in the United States is 3.25% and the inflation rate is 1.3%. a. How much is the real interest rate? b. What will happen to the real interest rate if – all else equal – the inflation rate increases? Provide an example to support your answer. How will the change in the real interest rate from part b, affect the quantity of savings in the United States? How will this change affect the supply of loanable funds. C.

Which of the following is a belief of classical theory? A. Long-run full employment B. Inflexible wages C. Inflexible prices D. All of the above answers are correct

What is most likely to happen to inflation and real output growthif a government raises taxes and its economy has a year of excellentweather for growing crops? Illustrate your verbal answer with a graph.Label everything!

What is likely to be true at the peak of the business cycle? A. Real GDP, unemployment, and inflation are all likely to increase.   B. Real GDP is increasing, unemployment is decreasing, and inflation is increasing.   C. Real GDP, unemployment, and inflation are all likely to decrease.   D. Real GDP is decreasing, unemployment is increasing, and inflation is steady or decreasing.

Write brief notes on the economic ideas of the following:1. James Tobin2. Andre Gunder Frank3. Supply-siders4. New classical

16. To be a Keynesian means that you believe in two principles. What are those two principles? a. b.