What fundamental problem does the New Keynesian model have,when compared to the data?
A) Investment fluctuates more than consumption.
B) The real wage moves too little.
C) Aggregate output demand does not matter.
D) Prices do not fluctuate in the right way.
Correct Answer:
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Q3: In the New Keynesian model,
A) money is
Q4: Suppose that there is an increase in
Q5: Why is it difficult to determine whether
Q6: Active stabilization policy can be rationalized in
Q7: A money supply increase in the New
Q9: Menu costs are
A) very small costs.
B) the
Q10: In the New Keynesian model,the central bank
Q11: What do we need to assume about
Q12: The central bank in the New Keynesian
Q13: If prices in the New Keynesian model
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