New Keynesian economics assumes rational expectations, flexible wages, and flexible prices.
Answer the following statement true (T) or false (F)
False
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Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the fourth satellite?
A) $36 B) $20 C) $18 D) $4
Keynes believed that prices and wages were rigid or fixed until the economy reaches ______.
a. equilibrium b. full employment c. recession d. expansion
If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then demand is:
A. elastic. B. inelastic. C. unitary elastic. D. horizontal.
Price fixing is illegal under the Sherman Act and subsequent legislation.
Answer the following statement true (T) or false (F)