In the New Keynesian Model, If There Are Shocks to Government

Multiple Choice

In the New Keynesian model, if there are shocks to government spending, and the central bank always reduces the output gap to zero,

A) the model replicates the key business cycle facts.
B) consumption is countercyclical.
C) employment is countercyclical.
D) investment is procyclical.
E) the money supply is constant.