Holding all else constant, an economic expansion in Mexico should decrease the demand for U.S. dollars

A horizontal aggregate supply curve reflects the assumption that the

A) price level is constant. B) velocity of money is constant. C) saving rate is equal to zero. D) economy is at full employment.

New Keynesian economics differs from real business cycle economics in that

a. markets are perfectly competitive in new Keynesian models. b. business cycles are fluctuations in the natural rate of unemployment in new Keynesian models. c. wages and prices are perfectly flexible. d. agents maximize utility in the new Keynesian model. e. none of the above.