"If domestic fuel prices rise to $5 per gallon, growth will slow significantly and our quality of life will decline." This philosophy is consistent with ________ economics.

Neoclassical economics was first proposed by David Ricardo and later continued by Adam Smith. it focuses on the determination of output and income distribution through supply and demand. The eternal problem with neoclassical economists is that they assume what should happen, but they do not consider the human factor in the economy. E.g. both wages and prices are sticky, but neoclassical economists argue that they shouldn't be that way in order to increase efficiency, but they cannot change the real world. Their expectations about how efficiency can be achieved are always unrealistic and could apply on an ideal world, but our world is full of problems and defects, so the ideal scenario is never real.

In this case, an increase in the price of gas will hurt the economy, but consumers aren't dumb, raising gas prices resulted in consumers buying more efficient vehicles.