Which of the Following Is True of the New Keynesian

question 89

Multiple Choice

Which of the following is true of the new Keynesian view of stabilization policy?

• A)It is necessary because shifts in aggregate demand are the main source of movements in current output.
• B)It is necessary during recessions but not during booms.
• C)It is unnecessary because output fluctuations reflect productivity disturbances.
• D)It is unnecessary because output fluctuations are largely the result of policy mistakes by the Fed.

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Definitions:

Partnership

A form of business conduct legally established among at least two partners with shared responsibilities and profit distribution.

Debts

Money owed by one party to another under an agreement that the amount will be paid back, often with interest, by a certain date.

Limited Partnership

A partnership consisting of one or more general partners and one or more limited partners.

Sole Proprietorship

A business structure where a single individual owns and operates the business, responsible for all its debts and liabilities.