Homework Answers
The new Keynesian theory justify the sluggish behavior of prices and how market failures in a financial crisis could be caused by ineffective monetary policies and justify government intervention. New Keynesian economists suggested that deficit spending encourage the saving, rather than increasing demand.
New Keynesian economist believed that prices and wages are "sticky," in nature meaning they adjust more slowly to short-term economic fluctuations. Thus it's explain factors as involuntary unemployment and the effect of monetary policies in financial crisis situation..
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Why is the new Keynesian macroeconomic model appropriate to analyse the causes and effects of monetary...
1 Like the new classical model, the new Keynesian model distinguishes between the effects from anticipated...
1 Like the new classical model, the new Keynesian model distinguishes between the effects from anticipated and unanticipated policy: Anticipated policy has a ……… ..effect on aggregate output than unanticipated policy. However, anticipated policy does matter to …………… fluctuations. Please choose one: a. Smaller - price b. Larger - output c. Larger - price D. Smaller - output 2.A rise in the money supply raises equilibrium output, but lowers the equilibrium interest rate. Select one of them: Right False 3. The new...
Briefly discuss major differences between the Monetary and Keynesian schools of macroeconomic thought.
Briefly discuss major differences between the Monetary and Keynesian schools of macroeconomic thought.
Which of the followings is not one of the assumption of the new Keynesian model? Please...
Which of the followings is not one of the assumption of the new Keynesian model? Please choose one: a. Prices are flexible. b. wages are sticky c. expectations are rational D. Prices are sticky 2. The IS curve traces out the combinations of the interest rate and aggregate output for which the money market is in equilibrium, and the LM curve traces out the combinations for which the market for goods and services are in equilibrium. Select one of them: Right...
Monetary Policy: Keynesian model a. Draw graphs for the IS-LM-FE model, the AD-AS model, and labor...
Monetary Policy: Keynesian model a. Draw graphs for the IS-LM-FE model, the AD-AS model, and labor market equilibrium for the Keynesian model with efficiency wages for an economy in a long-run equilibrium. Label equilibrium points.
1. a. Explain the macroeconomic effects of a monetary expansion in a small country with perfect capital mobility. b. Explain the macroeconomic effects of a monetary expansion in a small country with z...
1. a. Explain the macroeconomic effects of a monetary expansion in a small country with perfect capital mobility. b. Explain the macroeconomic effects of a monetary expansion in a small country with zero capital mobility.
In the Keynesian model, the difference between using monetary and fiscal policy to eliminate a recession...
In the Keynesian model, the difference between using monetary and fiscal policy to eliminate a recession is that________. an expansionary fiscal policy will leave the economy with a lower real interest rate than an expansionary monetary policy. fiscal policy will eliminate a recession quicker than monetary policy will. monetary policy will eliminate a recession quicker than fiscal policy will. an expansionary monetary policy will leave the economy with a lower real interest rate than an expansionary fiscal policy.
1. a. Explain the macroeconomic effects of a monetary expansion in a small country with perfect...
1. a. Explain the macroeconomic effects of a monetary expansion in a small country with perfect capital mobility. b. Explain the macroeconomic effects of a monetary expansion in a small country with zero capital mobility.
Using the New Keynesian model framework, try to use the model to explain the Great Recession,...
Using the New Keynesian model framework, try to use the model to explain the Great Recession, also include in the model the affects of the Monetary and Fiscal Policy pursued by the Federal Reserve and Federal Government, respectively. How would does your explanation change when using the Real Business Cycle model?
6. Monetary market. Describe the effects of an increase in output in the mon- etary market...
6. Monetary market. Describe the effects of an increase in output in the mon- etary market focus in the partial equilibrium effects, that is, you don't have to consider the other markets). Do it for the Real Business Cycle model and then for the Keynesian model. Remember that in the RBC model Monetary Policy is an exogenous decision made by the FED and prices are flexible, whereas in the NK model is an endogenous adjustment to eliminate any excess demand...
1950's Monetary Policy Examine the monetary policies in place at the start of the 1950's in...
1950's Monetary Policy Examine the monetary policies in place at the start of the 1950's in relation to their effects on macroeconomic issues. For instance, consider the discount rate set by the Fed, the rates on reserves, open market operations, and so on. Analyze new monetary policy actions undertaken by the U.S. government throughout the 1950's describing their intended effects, using macroeconomic principles to explain the actions. Explain the impact of the new monetary policy actions on individuals and businesses...
6. Monetary market. Describe the effects of an increase in output in the mon- etary market focus in the partial equilibrium effects, that is, you don't have to consider the other markets). Do it for the Real Business Cycle model and then for the Keynesian model. Remember that in the RBC model Monetary Policy is an exogenous decision made by the FED and prices are flexible, whereas in the NK model is an endogenous adjustment to eliminate any excess demand...
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