Recessions are generally measured as a ________ in ________

Joey cuts grass during the summer. He rents a lawn mower from his dad. Which of the following statements best illustrates the difference between the short run and the long run for Joey?

A) Joey's friends say they will help him, but when he calls them, they say they have other things to do. B) When Joey acquires more customers, he responds by working more hours. Next year, he will buy a lawn mower and split the work with his brother. C) Some customers pay Joey immediately; others wait till the following week. D) Joey has had to turn away some customers because he is already too busy.

Which of the following is true from the perspective of the New Keynesian school of thought?

a. Fluctuations in private spending does not affect aggregate demand in an economy. b. Investment spending remains relatively constant irrespective of the supply shocks. c. Fluctuations in aggregate demand are not the primary source of problem for policymakers. d. The government should limit its role to administrative functions. e. Monetary and fiscal policies often fail to restore macroeconomic equilibrium.