Author Question: According to the new Keynesian theory, the widespread importance of small menu costs results in ... (Read 36 times)

Jkov05 · **on:** Jun 30, 2018

According to the new Keynesian theory, the widespread importance of small menu costs results in variations in aggregate demand causing both

A) smaller short-run adjustments in real GDP and immediate adjustment in the price level.
B) smaller short-run adjustments in real GDP and delayed adjustment in the price level.
C) greater short-run adjustments in the real GDP and immediate adjustment in the price level.
D) greater short-run adjustments in real GDP and delayed adjustment in the price level.

Question 2

List all the sources of income-based payments to foreigners.

What will be an ideal response?

jjorrostieta · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

D

Answer to Question 2

The different sources of income-based payments to foreigners are as follows:
1. Paying income to foreigners in return for their goods and services imports.
2. Paying income on assets that foreign residents own in the domestic economy factor payments to foreigners.
3. Making transfers to individuals who reside abroad or to foreign governments transfers to foreigners.