Exam 17: New Classical Macro and New Keynesian Macro

Staggered,overlapping contracts mean

In the "non-market-clearing model" the level of final goods sales and unemployment during a recession are

The natural real GDP will ________ following a rise in energy prices because

Figure 17-1 -In the Friedman "Fooling Model" a ________ causes the labor supply curve to shift,and in Figure 17-1 above,if the initial equilibrium is at point C then,the new level of price expectations,POe is ________ than the initial level of Pe.

In Figure 17-4,below,initial demand,marginal cost,and marginal revenue curves (none of them shown)caused the firm to produce the profit-maximizing quantity Y₀ at a price of P₀.Now the demand and marginal cost curves have moved to those shown,with the marginal revenue curve running through point L. Figure 17-4 -If the firm in Figure 17-4 above maintains its set price of P₀,rather than dropping price to P₁,the loss of consumer surplus due to this decision is

Nonunion wages should be modeled as

The downfall of the fooling model is that it assumes an implausibly ________ level of perception about price on the part of ________.

A New Keynesian firm produces the output at which

While much of New Classical macroeconomics is being refuted by the evidence,at least one part of it may be a permanent legacy to all economists.It is the insistence on a certain aspect of macroeconomic policy:

Which of the following theories of business cycles implies that efficient markets,characterized by perfect information and by rational business firms and households,will still be characterized by business cycles?

The new Keynesian economists argue that prices are relatively rigid because of

Which of the following assumptions is found in Friedman's model but not in the new classical model?

It is reasonable to assume that in a developed economy technological shocks occur ________ across industries,which ________ the RBC theory of business cycles.

In the RBC model,actual real GDP is

The "old" Keynesian approach dominated macroeconomic theory until the

RBC theory leads to ________ government macro-stabilization policy,due to the theory's assumption of ________.

Classical macroeconomic theory was discredited and gave way to the first Keynesian approach as a result of

According to Gordon which of the following statements about Friedman's fooling model is accurate?

Of the four models of the business cycle,which model's implication concerning the change in real wages during recessions is consistent with actual observed changes in real wages during recessions?

Which of the following is NOT a basic assumption of the "Lucas" model?