A principle difference between the original Keynesian model and the new Keynesian model is that in the new version
A) the traditional assumptions of profit maximization is no longer included.
B) monetary policy is impotent.
C) wages and prices adjust slowly to market conditions.
D) All of the above are correct.
C
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A sudden rise in the market demand in a competitive industry leads to
a. A short run market equilibrium price higher than the original equilibrium b. A market equilibrium higher than the short run price c. Some firms exiting the market d. All of the above
According to the quantity theory of money, which one of the following economic variables would change in response to an increase in the money supply?
a. prices b. real income c. velocity d. employment
In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called
Which of the following is an effect of a subsidy that encourages exports?
a. The amount of labor used in production is lower. b. The raw materials needed for production are reduced. c. The costs of production have been reduced. d. The opportunity costs of production are lower.