Shocks to the economy occur: whenever the price level changes. whenever government implements fiscal or monetary policy. when expectations are unmet. because most economic behavior is unpredictable.

Because neoclassical economists assume that people are rational decision makers, they Multiple Choice are able to make better predictions about economic behaviors and outcomes. ignore the mental processes by which these decisions are made. believe that people never make suboptimal decisions. believe it is best to limit the number of options people have available.

Pick one answer for each question. 1. According to a neoclassical economist, the government should respond to a decrease in aggregate demand by ______. A. raising interest rates B. doing nothing C. balancing the budget 9. From a neoclassical perspective, the Phillips curve is vertical because ______. A. long-run unemployment is fixed at the natural rate of unemployment B. long-run aggregate supply is always the same as short-run aggregate supply c. the inflation rate is fixed in the long-run

What’s wrong with the rational actor model? Under what conditions is it appropriate for analyzing the economy?

From a neoclassical viewpoint, government should focus less on: A. long-term growth. B. controlling inflation. C. aggregate supply. D. cyclical unemployment.

*The classical problem of economics is?  a)establishing a fair tax system. b)providing social goods and services. c)developing a price mechanism that reflects the relative scarcities of products and resources d)allocating scarce productive resources to satisfy wants. e)enacting a set of laws that protects resources from overuse.

Behavioral economics is the field of economics that........... explores economic decision making using findings from experimental psychology. studies the impact of educational attainment on earnings. explores the impact of inflation on unemployment. attempts to explain macroeconomics using microeconomic foundations.

What are the implications and application of the principle-agent in the real economy? Lemon market case and hold up

When the covid-19 shock started in early 2020, supermarkets quickly ran out of toilet paper as panic buying took place and its price remained the same. Illustrate these effects using a well-labelled supply and demand graph and explain the outcome