In the Current Debate Over Economic Policy,the New Classical Macroeconomists

Multiple Choice

In the current debate over economic policy,the new classical macroeconomists argue that

A) the economy is at a full-employment equilibrium when money demand equals aggregate demand.
B) fiscal policy is effective in stabilizing the economy.
C) prices are upwardly flexible.
D) economic instability results primarily from the spending behavior of the private sector.
E) discretionary monetary and fiscal policies are ineffective in eliminating recessionary and inflationary gaps and may even promote instability.