Exam 14: New Keynesian Economics: Sticky Prices

Compared to monetary policy, fiscal policy leads to

In the New Keynesian model, an increase in current total factor productivity

In comparing the outcomes of increasing government spending to reduce Keynesian unemployment as opposed to increasing the money supply, the increase in government spending results in

An increase in future total factor productivity shifts the

Crowding out of private expenditure occurs when

If there are total factor productivity shocks in the New Keynesian model, and the central bank always reduces the output gap to zero,

When there is Keynesian unemployment in the New Keynesian model, a Pareto optimum can be reached by

In the New Keynesian model, the central bank's policy target is

Keynesian sticky price models are typically called

In the New Keynesian model, an increase in current total factor productivity

An important feature of the New Keynesian model is that

A key criticism of New Keynesian models is

The natural rate of interest is

Most central banks, including the Bank of Canada,

Menu cost models

In the New Keynesian model, an increase in the money supply

In the New Keynesian model, an increase in future total factor productivity

In the long run, most Keynesians believe

The argument that the nominal wage is fixed because of long-term labour contracts

If a shock results in a positive output gap and the government's policy choice is to do nothing,