A new Classical view is that business cycle fluctuations are the responses of a well-functioning market economy that is bombarded by shocks that arise from the uneven pace of .

The correct words for the blank spaces are: efficient; technological change.

Explanation:

The New Classical school of Economics was originated at the beginning of the 1970s having as its main characters to American economists Robert Lucas (born in 1937) and Edward Prescott (born in 1940). New classicals pay special attention to economic models based on individuals' behaviors, indicating they pursue to maximize their utility by making rational decisions.

When it comes to business cycles, they proposed fluctuations in the economy were boosted by unanticipated "shocks". Changes in aggregate demand were the result of unexpected monetary or fiscal policies. Changes in aggregate supply were caused by efficient changes in productivity as a result of temporary changes in technology.

answer; the correct answer is (direct foreign investment);

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