In the New Keynesian View, the Larger the Proportion of Firms

question 66

Multiple Choice

In the new Keynesian view, the larger the proportion of firms in the economy with sticky prices,

• A)the steeper the SRAS curve will be.
• B)the flatter the SRAS curve will be.
• C)the greater the increase in the price level for a given shift in the AD curve.
• D)the less effective is fiscal policy in increasing output.

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