Exam 14: New Keynesian Economics: Sticky Prices

Recent research by Mark Bils and Peter Klenow suggest that

In the New Keynesian model,the output demand curve represents combinations of

To support the argument for an active role for government in stabilizing the economy,it must be true that

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

The Yd(IS)curve is downward sloping to reflect the

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

Milton Friedman's assertion that the government abstain from stabilization policy can be supported by

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

Keynes argued that a principal cause of business cycles is fluctuations in

Compared to monetary policy,fiscal policy leads to

Compared to fiscal policy,the monetary policy lag between

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

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

A traditional liquidity trap is problematic for a New Keynesian policy maker because there is a

The natural rate of interest is

The main difference between the New Keynesian model and the basic monetary intertemporal model is that in the New Keynesian model,

The output gap is the difference between

An increase in the demand for investment goods causes

Crowding out of private expenditure occurs when