In the New Keynesian View, a Disinflation Policy

question 44

Multiple Choice

In the new Keynesian view, a disinflation policy

• A)will almost always result in a recession.
• B)will rarely be credible.
• C)should use the cold turkey, rather than the gradual, approach.
• D)shifts the LRAS curve.

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Definitions:

Economic Profit

The gap between the complete income and all expenses, covering overt and hidden costs.

Minimum Wage

A price floor set for the price of labor.

Cost Curves

Graphs that depict the relationship between the cost of producing goods and the quantity produced.

TR

Total Revenue, the total income received by a firm from sales before any expenses are subtracted.