A money supply increase in the New Keynesian model is not neutral because
A) consumers are fooled into working harder.
B) the real interest falls, the quantity of output demanded rises, and firms supply more output.
C) productivity rises, increasing output supply.
D) bank lending rises.
C
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Assume equilibrium at full employment for an economy characterized by the simple Keynesian model. If the government raises taxes to eliminate a budget deficit, then
A) the rate of unemployment will increase. B) the level of aggregate output will increase. C) the price level will increase. D) the rate of interest will fall.
Cyclical majorities can occur when _____
a. voters have single-peaked preferences b. voters are rationally ignorant c. voters are irrationally ignorant d. voters do not have single-peaked preferences
Limited personal liability is an advantage for
A) sole proprietorships and partnerships. B) partnerships and corporations. C) sole proprietorships and corporations D) corporations.
If a firm takes the wage as given, then the firm's marginal expenditure on labor curve is
A) above the labor supply curve. B) below the labor supply curve. C) the same as the labor supply curve. D) upward sloping.