Unanticipated monetary policy designed to reduce inflation would lead to a reduction in employment under which model?
A) standard Keynesian
B) new classical
C) new Keynesian
D) all of the above

Question

Quizplus · Accepted Answer

All of the models mentioned (standard Keynesian, new classical, and new Keynesian) predict that unanticipated monetary policy aimed at reducing inflation can lead to a reduction in employment, albeit for different reasons and mechanisms within each model.

Unanticipated Monetary Policy Designed to Reduce Inflation Would Lead to a Reduction