Stabilization policy is policy that seeks to A) get zero ...

[tuffie]

Stabilization policy is policy that seeks to
 
  A) get zero inflation.
  B) eliminate fluctuations.
  C) eradicate unemployment.
  D) maximize output.

Question 2

What fundamental problem does the New Keynesian model have, when compared to the data?
 
  A) Investment fluctuates more than consumption.
  B) The real wage moves too little.
  C) Aggregate output demand does not matter.
  D) Prices do not fluctuate in the right way.

[meryzewe]

Answer to Question 1

B

Answer to Question 2

D