In the New Keynesian Rational Expectations model, when the nominal interest rate is constant forever
A) in the long run, the inflation rate explodes.
B) in the long run, the inflation rate equals minus the natural real rate of interest plus the nominal interest rate.
C) in the long run, the inflation rate equals the natural real rate of interest minus the nominal interest rate.
D) in the long run, the inflation rate equals minus the natural real rate of interest minus the nominal interest rate.
E) in the long run, the inflation rate equals the natural real rate of interest plus the nominal interest rate.
Correct Answer:
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Q2: In practice, the Bank of Canada
A)targets inflation,
Q3: The Phillips curve was first noticed in
Q4: Neo-Fisherism
A)is widely accepted.
B)involves thinking about radical new
Q5: The Bank of Canada commenced inflation targeting
Q6: In the Basic New Keynesian model, when
Q8: The Neo-Fisherian result that increasing the nominal
Q9: The central bank loss function can be
Q10: For the central bank, loss increases as
A)the
Q11: In 1981, inflation in Canada reached
A)13%.
B)5%.
C)2%.
D)200%.
E)20%.
Q12: In the New Keynesian Rational Expectations model
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