The New Keynesian Approach Shares with the New Classical Approach

question 53

Multiple Choice

The new Keynesian approach shares with the new classical approach

• A)the assumption of rational expectations.
• B)the conclusion that money does not affect output in the short run.
• C)the conclusion that only unexpected changes in the money supply affect output in the short run.
• D)the assumption that the short aggregate supply curve is vertical.

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Definitions:

Ozone Content

The concentration of ozone molecules, typically referenced in the context of the Earth's stratosphere where the ozone layer protects life by absorbing harmful UV radiation.

Brahmaputra River

A major river in South Asia, flowing through China, India, and Bangladesh, known for its significant role in irrigation and transportation.

Himalaya

A major mountain range in Asia, formed by the collision of the Indian and Eurasian tectonic plates.

Monsoon

Refers to winds that reverse directions depending on the season.