The new classical explanation of aggregate supply is also known as
C) the misperception theory.
D) the adaptive expectations theory.
The new classical explanation of aggregate supply in the short run builds on research by
A) Irving Fisher.
B) John Maynard Keynes.
C) Robert Lucas.
D) Robert Solow.
The key concept in the new classical approach to the aggregate supply curve is
A) the impact of imperfect information on business decisions.
B) the impact of changes in the price level on real money balances.
C) the inverse relationship between the real interest rate and desired investment spending.
D) the crowding out of investment spending by government spending.
The new classical approach to the aggregate supply curve assumes that businesses are
A) better informed about the general price level than they are about prices in their own markets.
B) better informed about prices in their own markets than they are about the general price level.
C) equally well informed about prices in their own markets and the general price level.
D) reluctant to engage in investment spending because of a lack of information concerning future prices.