A _______macroeconomist believes that business cycle fluctuations are the efficient responses of a well- functioning market economy that is bombarded by shocks that arise from the uneven pace of technological change.A _______ macroeconomist believes that the short- run aggregate supply curve is horizontal at a fixed price level.
A)new classical; new Keynesian
B)monetarist; new classical
C)classical; monetarist
D)Keynesian; new Keynesian
E)new classical; monetarist

Question

Quizplus · Accepted Answer

A new classical macroeconomist believes in the efficient market hypothesis and that fluctuations are due to external shocks, while a new Keynesian macroeconomist believes in the importance of market failures and the need for government intervention. A monetarist also believes in the efficiency of markets but places a greater emphasis on the role of monetary policy. Classical macroeconomists believe in the self-regulating nature of the market and the invisibility of the hand of government. The statement about the short-run aggregate supply curve being horizontal at a fixed price level is only true for new Keynesian macroeconomists.

A _______Macroeconomist Believes That Business Cycle Fluctuations Are the Efficient