The New Keynesian Theories Which Are Based on Microeconomic Foundations

Multiple Choice

The new Keynesian theories which are based on microeconomic foundations assert that

A) unanticipated fiscal policy changes cannot affect the output level in the short run
B) anticipated monetary policy changes have no real short-run effect on output
C) under imperfect competition individual actions of consumers or firms can lead to socially undesirable outcomes
D) markets tend to be perfectly competitive, so firms are price takers
E) most firms have considerable monopoly power, so they change their prices immediately after a disturbance has occurred