The new Keynesians believe that the economy is not always in equilibrium because:
a. of the existence of voluntary unemployment.
b. the Federal Reserve policy is too restrictive.
c. government intervention destabilizes the economy.
d. of the existence of wage and price rigidities.
e. the rate of inflation is too high.
d
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Of the following, which is CORRECT?
A) Nominal GDP does not change when the production of goods and services increases. B) Nominal GDP is not affected by changes in prices of goods and services. C) Nominal GDP increases when the prices of goods and services increase. D) Real GDP changes only when the prices of goods and services really change.
In a closed economy, public saving is equal to which of the following? (Y = GDP, C = Consumption, G = Government purchases, T = Taxes, and TR = Transfers)
A) Y - C - T + TR B) Y - G - T C) T - G - TR D) Y - C - T Scenario 21-1 Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I = $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion