In the New Keynesian model, if there is a decrease in anticipated future total factor productivity, then
A) there should be no change in monetary or fiscal policy.
B) the central bank's interest rate target should be increased.
C) government spending should fall, and the central bank's interest rate target should rise.
D) government spending should increase.
D
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Answer the following questions true (T) or false (F)
1. Marginal benefit is the benefit that your activity provides to someone else. 2. If it costs Vijay $150 to design 5 Web sites and $175 to design 6 Web sites, then $175 is the marginal cost of producing the 6th Web site. 3. Suppose the extra cost for a municipality to enact a "no texting while driving" law is $15,000 per year. Then, the municipality should enact the law if it receives a total benefit from all of its traffic laws of $15,000 per year.
Along a downward-sloping straight-line demand curve,
A. demand is perfectly elastic when price is zero. B. demand is unit elastic at all prices. C. demand is very inelastic at high prices but becomes more elastic as price decreases. D. demand is very elastic at high prices but becomes less elastic as price decreases.