The Keynesian View Implies That There Is a Role for Monetary

question 4

Multiple Choice

The Keynesian view implies that there is a role for monetary and fiscal policy in stabilizing the economy in response to aggregate shocks because

• A) prices and wages are slow to clear markets.
• B) money is neutral.
• C) comovement of aggregate variables does not generally happen during the business cycle.
• D) business cycles have many causes.
• E) these policies are highly effective in raising total factor productivity.

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