Author Question: A difference between the new classical and monetarist models is that expectations in the new ... (Read 44 times)

jenna1 · **on:** Jun 30, 2018

A difference between the new classical and monetarist models is that expectations in the new classical model are _____ while they are _____ in the monetarist model

a. forward looking; backward looking.
b. rational; adaptive.
c. correct; mistaken.
d. perfectly competitive; imperfectly competitive.
e. both a and b.

Question 2

Which statement(s) is (are) consistent with a positive relationship between inflation and the output gap?

A) If output rises above its potential level, the unemployment rate falls and firms will raise wages and prices more rapidly.
B) In the short run, the AS curve is upward sloping.
C) Through Okun's law, the negative relationship between the output and unemployment gaps allows the modern Phillips curve to be translated into the AS curve.
D) all of the above
E) none of the above