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Under the Assumptions of the New Keynesian Model,an Increase in Aggregate

Question 140

Multiple Choice

Under the assumptions of the new Keynesian model,an increase in aggregate demand will


A) increase prices and output in the short-run.
B) lead to a decrease in unemployment and an increase in prices in the short run.
C) lead to an increase in the nominal wage rate in the long run and a decrease in unemployment in the short run.
D) All of the above are correct.

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