In the rational expectations model
A) markets are perfectly competitive and in equilibrium.
B) markets may not clear even if wages and prices are otherwise perfectly flexible.
C) markets may temporarily be in disequilibrium.
D) only anticipated changes in aggregate demand affect output.
Correct Answer:
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Q20: Discuss the new classical critique of Keynesian
Q21: In the new classical model,stabilization policies
A)cannot affect
Q22: Monetarists and Keynesians agree that expectations are
A)backwards-looking.
B)rational.
C)unstable.
D)forwards-looking.
Q23: When expectations are rational,
A)a foreseen expansionary policy
Q24: Keynesians disagree with the new classical model
Q26: If government policy makers become more secretive,then
Q27: According to the new classical theory,a monetary
Q28: Like the monetarists,new classical economists favor
A)money growth
Q29: "All available information" in the definition of
Q30: According to new classical economists,
A)deficits should have
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