Multiple Choice
The reason inflation ________ in the Smets-Wouters DSGE model if TFP rises is because ________.
A) falls; TFP increases potential output, which expands supply
B) rises; inflationary expectations rise
C) rises; aggregate demand rises with higher incomes
D) stays the same; of money neutrality
E) falls; real interest rates adjust to equal the marginal product of capital
Correct Answer:
Verified
Correct Answer:
Verified
Q20: With sticky nominal wages, a monetary expansion
Q21: In DGSE models, the dynamics of how
Q22: When taxes are included in the stylized
Q23: With a nominal price rigidity, firms cannot
Q24: Refer to the following figure when answering
Q26: In the Smets-Wouters DSGE model presented in
Q27: The fact that _ almost as sharply
Q28: Refer to the following figure when answering
Q29: Which of the following could be a
Q30: In the DSGE framework, prospects for a