Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 8, Problem 4RQ
To determine
The reason for holding the classical dichotomy in long run.
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Are all prices in the economy equally inflexible? Which ones show large amounts of short-run flexibility?
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Chapter 8 Solutions
Macroeconomics (Fourth Edition)
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Similar questions
- The long run in macroeconomics is the period of time in which prices do not change or do not change very much. True False Glick to select yeur anewerarrow_forwardExplain why classical assumptions are not realistic?arrow_forwardTrue or False? Looking along the aggregate demand curve, deflation will lead to a lower level of GDP.arrow_forward
- Is it possible for there to be inflation present in the economy and still witness a decline in a large number of goods? If so, how and why is this possible?arrow_forwardIf markets do not self-adjust, how can a decline in spending lead to a negative process that ruins an economy?arrow_forwardOne practical limitation of the Classical or Neoclassical model is that it suggests allowing the economy to self-correct in the long run, but recessions may last a very long time. How severe is this problem and why? What is one example?arrow_forward
- How does the aggregate demand and aggregate supply looks in the long run. Explain with the help of a proper graph.arrow_forwardWhat is neoclassical theory? Please use your own wordsarrow_forwardGive an example of an event which causes the economy to go from point D to point B in the long run.arrow_forward
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