What fundamental problem does the New Keynesian model have, when compared to the data?
A) Investment fluctuates more than consumption.
B) The real wage moves too little.
C) Aggregate output demand does not matter.
D) Prices do not fluctuate in the right way.
D
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An increase in aggregate demand will shift the short-run Phillips curve to the right.
Answer the following statement true (T) or false (F)
A decrease in the cost of production will shift the supply curve down and to the right
Indicate whether the statement is true or false
The fastest-growing areas for state expenditures are
A. Transportation and public safety. B. Education and welfare. C. Prisons and welfare. D. Sewage and trash service.
The present value of future payments depends on:
a. whether the payment is interest or dividends. b. the marginal propensity to save. c. the interest rate. d. sunk costs.