Imports reflect the domestic needs for foreign goods, which vary
together with domestic economic growth.
Economics MCQ - Economics Section 2
Exports reflect the foreign demands on domestic output, which depend
on the conditions of global economy.
As suggested by the earliest RBC models, a person is unemployed
because he or she is asking for wages that are too high
- A New Classical models are monetarist, whereas Neo-Keynesian models are not.
- B New Classical models use utility-maximizing agents, whereas NeoKeynesian does not.
- C New Classical models assume that prices adjust quickly to changes in supply and demand, whereas Neo-Keynesians assume that prices adjust slowly.
A key feature of Keynesian macroeconomics is the stickiness of prices.
In contrast, Classical views assume flexible price adjustments that
ensure market clearing.
The Austrian economic school attributes the primary cause of business
cycle to misguided government intervention.
