The new Keynesians emphasize the importance of
A) rational expectations. B) sticky wages and prices.
C) real causes of the business cycle. D) the monetary growth rule.
B
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What is the key difference between the aggregate expenditure model and the aggregate demand/aggregate supply model?
A) The aggregate expenditure model examines monetary policy, whereas the aggregate demand/aggregate supply model does not. B) The aggregate demand/aggregate supply model assumes that the price level is fixed. C) The aggregate expenditure model assumes that real GDP is fixed. D) The aggregate expenditure model assumes that the price level is fixed. E) Monetary and real factors interact in the aggregate demand/aggregate supply model.
Everything else held constant, a decrease in holdings of excess reserves will mean
A) a decrease in the money supply. B) an increase in the money supply. C) a decrease in checkable deposits. D) an increase in discount loans.