A _______ macroeconomist believes that the economy is self- regulating and always at full employment.A _______ macroeconomist believes the economy requires active help from fiscal policy and monetary policy to maintain full employment.
A)new classical; monetarist
B)Keynesian; new Keynesian
C)monetarist; classical
D)classical; Keynesian
E)classical; monetarist

Question

Quizplus · Accepted Answer

A classical macroeconomist believes in the self-regulating nature of the economy and does not advocate for government intervention to maintain full employment. On the other hand, a Keynesian macroeconomist believes that the economy may not always be self-regulating and requires government intervention through fiscal and/or monetary policy to maintain full employment. The new Keynesian school of thought acknowledges the role of market forces in the economy but also emphasizes the importance of nominal rigidities and other market imperfections that Keynesian economics addresses.

A _______ Macroeconomist Believes That the Economy Is Self- Regulating