New Classical economics is a model that assumes markets areMultiple choice question.monopolistically competitive markets and prices and wages are sticky.monopolies with market power by a small number of firms across all industries.oligopolies with price making abilities due to cartels.perfectly competitive and there are rapid adjustments to new economic equilibrium.
Question
New Classical economics is a model that assumes markets areMultiple choice question.monopolistically competitive markets and prices and wages are sticky.monopolies with market power by a small number of firms across all industries.oligopolies with price making abilities due to cartels.perfectly competitive and there are rapid adjustments to new economic equilibrium.
Solution
The correct answer is: perfectly competitive and there are rapid adjustments to new economic equilibrium.
New Classical economics assumes that markets are perfectly competitive. This means that there are many buyers and sellers in the market, and none of them have the power to significantly affect the price of an individual product or service on their own.
Furthermore, New Classical economics also assumes that there are rapid adjustments to new economic equilibrium. This means that if there is any change in the market, the economy will quickly adjust to this change and a new equilibrium will be established.
This model is based on the idea of rational expectations, which suggests that individuals and firms in the economy will make decisions based on their rational outlook, available information and past experiences.
Therefore, the answer is: perfectly competitive and there are rapid adjustments to new economic equilibrium.
Similar Questions
New Keynesian economics is a model that assumes markets areMultiple choice question.oligopolies with price making abilities due to cartels.monopolistically competitive markets and prices and wages are sticky.perfectly competitive and there are rapid adjustments to new economic equilibrium.monopolies with market power by a small number of firms across all industries.
New Classical models of economics argues that the majority of markets areMultiple choice question.monopolistically competitive, while New Keynesian models argue they are oligopolies.oligopolies, while New Keynesian models argue they are monopolistically competitive.monopolistically competitive, while New Keynesian models argue they are perfectly competitive.perfectly competitive, while New Keynesian models argue they are monopolistically
The economic models that assume markets are monopolistically competitive and adjustments to equilibrium take time due to sticky wages and prices is known asMultiple choice question.monetarism.the New Classical Model.the New Keynesian Model.Keynesian economics.
The economic models that assume markets are perfectly competitive and there are rapid adjustments to new economic equilibrium is known asMultiple choice question.monetarism.the New Classical Model.the New Keynesian Model.Keynesian economics.
Monopolistic competition is characterized by firmsMultiple Choiceproducing differentiated products.making economic profits in the long run.producing at optimal productive efficiency.producing where price equals marginal cost.
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