Question 1 Neoclassical economists focus on O long run aggregate supply O long run aggregate demand O short run aggregate demand O short run aggregate supply Question 2 Which of the following is a view held by neoclassical economists? O By the time the government detects a recession and implements a government policy, the economy can already be recovering DO Aggregate demand is unstable and is the main cause of short run fluctuations The economy takes a long time to adjust because wages and prices are sticky There is a tradeoff between inflation and unemployment Question 3 Neoclassical economists prefer to do nothing when there is a recession because recessions are painful O the economy will self-adjust wages and prices are sticky O politicians are greedy Question 4 Which of the following is an example of adaptive expectations? O people look only at past data to determine future outcomes O people take a guess to determine future outcomes O people look at all the data to determine future outcomes O people look only at present data to determine future outcomes Question 5 Neoclassical economists would rather focus on O increasing the natural rate of unemployment O reducing cyclical unemployment O reducing the natural rate of unemployment O reducing frictional unemployment