Multiple Choice
Two key assumptions of new Keynesian theory include:
A) (1) people hold rational expectations,and (2) wages and prices are not completely flexible in the short run.
B) (1) people hold adaptive expectations,and (2) wages and prices are inflexible.
C) (1) people hold rational expectations,and (2) wages and prices are flexible.
D) (1) people hold neither adaptive nor rational expectations and (2) prices are inflexible.
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q82: According to rational expectations theory,<br>A) every day
Q83: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB6439/.jpg" alt=" -Refer to Exhibit
Q84: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB6439/.jpg" alt=" -Refer to Exhibit
Q85: Stagflation is the simultaneous occurrence of<br>A) low
Q86: The short-run Phillips curve holds that<br>A) high
Q88: Suppose that the government implements expansionary fiscal
Q89: If the public has rational expectations,<br>A) the
Q90: Milton Friedman argued that there<br>A) are two
Q91: The economy is in long-run equilibrium when
Q92: According to new Keynesian theory,if policy is