[Answered] Under a liquidity trap in the New Keynesian model, A) prices cannot be sticky. B) monetary ...

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Author Question: Under a liquidity trap in the New Keynesian model, A) prices cannot be sticky. B) monetary ... (Read 53 times)

NguyenJ

Hero Member
Posts: 516

on: Jun 30, 2018

Under a liquidity trap in the New Keynesian model,

A) prices cannot be sticky.
B) monetary policy is ineffective.
C) the economy is always efficient.
D) fiscal policy is ineffective.

Question 2

Changes in liquidity in the banking system affect ________.

A) the nominal interest rate
B) the real interest rate
C) the federal funds rate
D) all of the above
E) none of the above

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cuttiesgirl16

Sr. Member
Posts: 345

Reply #1 on: Jun 30, 2018

Answer to Question 1

B

Answer to Question 2

D

NguyenJ

Hero Member
Posts: 516

Reply #2 on: Jun 30, 2018

Thank you

cuttiesgirl16

Sr. Member
Posts: 345

Reply #3 on: Jun 30, 2018

Happy to help you

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