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What is the New Classical Macroeconomics?
It is actually characterized by the form of monetarism and it argues that the demand management intervention that is run by government turns out to be ineffective in the short-run as well. It can advocate far reaching the tax cuts.
The new classical macroeconomics would incorporate along with the Lucas aggregate supply hypothesis which is based on two different assumptions:
- Rational decisions that is adopted by workers and firms which reflects the optimizing behavior.
- Supply of labor by the workers and the output gained by firm depends on relative prices.
New Classical macroeconomics assignment help will show you that the aggregate supply hypothesis is obtained from the behavior of workers and the supply of labors from firm would depend on relative price.
Approaches of New classical macroeconomics
There are three important new classical approaches that have emerged:
- Free market approach–
In this case the market is all alone sufficient enough to generate maximum welfare.
- Public choice approach–
It emphasize on the government that is bad and finally leads to corruption.
- Market friendly approach:
While opting for New Classical macroeconomics assignment help it would give knowledge that it is an approach where market works but it may fail to emerge and government is responsible for compensating.
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