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Author Question: Under a liquidity trap in the New Keynesian model, A) prices cannot be sticky. B) monetary ... (Read 39 times)

NguyenJ

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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

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Reply #1 on: Jun 30, 2018
Answer to Question 1

B

Answer to Question 2

D


NguyenJ

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Reply #2 on: Jun 30, 2018
Thank you :)


cuttiesgirl16

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Reply #3 on: Jun 30, 2018
Happy to help you


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