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- Subject
- Roots of Modern Macroeconomicseconomics-mcqs › roots-of-modern-macroeconomics
- Published
- 30 May 2019
- Last updated
- 28 May 2026
Explanation
The new classical school of economics holds that markets clear quickly and that changes in the money supply primarily affect price levels, not employment. This contrasts with Keynesians, post-Keynesians, and monetarists, who have different views on market adjustments and monetary effects.
More Roots of Modern Macroeconomics MCQs
Practice related questions from the same subject.
- 1.What is the key assumption in new classical macroeconomics that is often questioned for its realism?
- 2.Why is it challenging to assess if the velocity of money remains steady over time?
- 3.According to the quantity theory of money, what effect does a specific percentage change in the money supply have?
- 4.What does it mean when individuals are described as having rational expectations?
- 5.What is the theory called that assumes individuals have full knowledge of the actual economic model and utilize it to predict future outcomes?
- 6.What term describes the government's ability to influence the overall economy through policy adjustments?
- 7.According to Keynesian theory, what primarily determines the level of employment in an economy?
- 8.In traditional economic theories, what is the main factor that determines the level of employment?
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