Author Question: What is the main difference between new Keynesian economists and monetarists? a. Monetarists ... (Read 77 times)

bio_gurl · **on:** Jun 30, 2018

What is the main difference between new Keynesian economists and monetarists?
a. Monetarists support a fixed-price model, whereas new Keynesians believe that pricesfluctuate.
b. Monetarists reject the idea that government intervention can stabilize the economy,whereas new Keynesians support this notion.
c. Monetarists believe that the aggregate supply curve is always horizontal, whereas newKeynesians believe that the aggregate supply curve is always vertical.
d. Monetarists believe that an increase in the money supply changes real GDPinstantaneously, whereas new Keynesians assume that economic policy operates witha long and variable lag.
e. Monetarists believe that deficit spending helps stimulate economic growth, whereas new Keynesians advocate a balanced budget.

Question 2

If the measured elasticity of supply coefficient equals 1.3, then supply is:
a. perfectly elastic.
b. elastic.
c. unit elastic.
d. inelastic.