The New Keynesian model has the property that in the short run
A)money is neutral.
B)government policy is neutral.
C)total factor productivity is neutral.
D)the Bank of Canada is neutral.
E)money is not neutral.

Question

Quizplus · Accepted Answer

The New Keynesian model distinguishes between the short run and the long run, and in the short run, money is not neutral. This means that changes in the money supply can have real effects on output and employment in the economy.

The New Keynesian Model Has the Property That in the Short