Which group of contemporary economists argues that markets adjust almost instantly and that increasing the money supply only leads to higher prices without boosting employment?

Multiple choice question for Roots of Modern Macroeconomics. Select an option, then review the explanation below.

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.

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?

Which group of contemporary economists argues that markets adjust almost instantly and that increasing the money supply only leads to higher prices without boosting employment?

Explanation

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