Ch26 Neoclassical Perspective

*Ch26 Neoclassical Perspective*

*Multiple Choice Questions*

*1.* ________________ economists place an emphasis on __________ run economic performance.

A. Phillips; short
B. Keynesian; long
C. Neoclassical; long
D. Says; short

Answer: C Reference:

Explanation:

Type: Multiple Choice

*2.* The neoclassical perspective on macroeconomics emphasizes that in the long run, the economy seems to rebound back to its _____________ and its ____________________.

A. long term growth; cyclical unemployment
B. potential GDP; natural rate of unemployment
C. natural level of output; cyclical unemployment rate
D. real GDP; natural rate of unemployment

Answer: B Reference:

Explanation:

Type: Multiple Choice

*3.* Which of the following is a building block of neoclassical economics?

A. the size of the economy is determined by real GDP
B. sticky wages and prices
C. aggregate demand model
D. wages and prices will adjust in a flexible manner

Answer: D Reference:

Explanation:

Type: Multiple Choice

*4.* Which of the following government policies would be supported by neoclassical macroeconomic assumptions?

A. focus on long-term growth and on controlling inflation
B. focus on short-term recession and controlling inflation
C. focus on combating depression and cyclical unemployment
D. focus on real GDP and cyclical unemployment

Answer: A Reference:

Explanation:

Type: Multiple Choice

*5.* Which of the following represents a Keynesian point of view of macroeconomics?

A. focus on long-term growth in the economy
B. aggregate supply is the primary determinate of economic output
C. creating increases in aggregate demand to reduce unemployment
D. vertical aggregate supply

Answer: C Reference:

Explanation:

Type: Multiple Choice

*6.* From a neoclassical viewpoint, government should focus less on:

A. long-term growth.
B. controlling inflation.
C. aggregate supply.
D. cyclical unemployment.

Answer: D Reference:

Explanation:

Type: Multiple Choice

*7.* The neoclassical view holds that long-term expansion of potential GDP due to _______________________ will determine ____________________.

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