In the New Keynesian View, Which of the Following Expressions

question 51

Multiple Choice

In the new Keynesian view, which of the following expressions correctly states the relationship between the price that an individual firm with flexible prices charges and the aggregate price level?

• A)p = P + b(Y - Y)
• B)P = p + b(Y - Y)
• C)p = P + b(Y + Y)
• D)p = P + b(Y - Y)

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