Explain what is meant by "new Keynesians" and discuss some of the research conducted in this area
What will be an ideal response?
New Keynesians focus on the implications of market imperfections such as nominal rigidities. This research has also focused on the determination of wages (e.g. efficiency wage theory). Others have focused on "menu costs" to explain why prices might not adjust as rapidly to clear product markets.
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Each point on the demand curve indicates
a. the demand for the product. b. the quantity demanded at that price. c. the amount that people need. d. the amount people want to buy at different income levels.
Drug-interdiction policies that reduce the supply of illegal drugs
a. are likely to be more effective in the short run than in the long run. b. are proven to reduce illegal drug use faster than drug-education programs designed to reduce demand. c. may increase drug-related crimes. d. All of the above are correct.
A farm equipment retailer in Azerbaijan exchanges Azerbaijan manats (the currency of Azerbaijan) for $300,000 a bank in Azerbaijan was holding. It uses the $300,000 to buy farm equipment from a U.S. company. The U.S. company deposits half of these funds
in a U.S. bank and exchanges the other half for euros from a bank in London. As a result of these transactions, by how much, if at all, and in which direction did: A. U.S. net exports change? B. U.S. net capital outflow change?
For the efficient level of output to be produced, marginal
A. private cost must equal zero. B. benefit must equal marginal social cost. C. benefit must equal marginal private cost. D. social cost must be zero.