In the New Keynesian model, an increase in current government spending
A)decreases output and increases the real wage rate.
B)decreases output and decreases the real interest rate.
C)decreases output and increases the real interest rate.
D)increases output and decreases the real interest rate.
E)increases output and leaves the real interest rate unchanged.

Question

Quizplus · Accepted Answer

The Answer of In the New Keynesian model, an increase in current government spending
A)decreases output and increases the real wage rate.
B)decreases output and decreases the real interest rate.
C)decreases output and increases the real interest rate.
D)increases output and decreases the real interest rate.
E)increases output and leaves the real interest rate unchanged.

In the New Keynesian Model, an Increase in Current Government