Question

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 classical macroeconomic model leads to the policy ineffectiveness proposition that anticipated policy has no effect on output; only ……………… ..policy matters.

Please choose one:

a. Unanticipated

b. anticipated

c. Traditional

D. Keynesian

4.

Which of the followings is not the factor that cause the aggregate supply curve to shift?

Please choose one:

a. Consumer preferences.

b. Supply shocks unrelated to wages that affect production costs.

c. Tightness of the labor market as represented by unemployment relative to the natural rate.

D. Expectations of inflation

Answer 1

1.Like the new classical model, the new Keynesian model distinguishes between the effects from anticipated and unanticipated policy: Anticipated policy has a …larger..effect on aggregate output than unanticipated policy. However, anticipated policy does matter to output fluctuations.

2.It is true that A rise in the money supply raises equilibrium output, but lowers the equilibrium interest rate.

3.The new classical macroeconomic model leads to the policy ineffectiveness proposition that anticipated policy has no effect on output; only unanticipated policy matters.This means that if policy is unanticipated then it will have an effect on output.

4. Consumer Preferences is not the factor that cause the aggregate supply curve to shift?