Author Question: The new classical school holds that: a. macroeconomic equilibrium is achieved only through active ... (Read 21 times)

jenna1 · **on:** Jun 30, 2018

The new classical school holds that:
a. macroeconomic equilibrium is achieved only through active government intervention.
b. unemployment is only temporary, because the economy tends naturally toward equilibrium.
c. rigid prices and wages prevent the economy from achieving equilibrium.
d. macroeconomic equilibrium cannot occur as long as the aggregate supply curve isvertical.
e. rational expectations result in involuntary unemployment and prolonged periods of macroeconomic disequilibrium.

Question 2

For a given change in demand:
a. Quantity will change relatively more in the long run than the short run.
b. Quantity will change relatively more in the short run than the long run.
c. Price will change relatively more in the long run than the short run.
d. Both b. and c. are true.