In the New Keynesian Model, an Increase in the Money

question 36

Multiple Choice

In the New Keynesian model, an increase in the money supply

• A) decreases the real interest rate, increases real aggregate output, decreases the real wage rate, and increases employment.
• B) increases the real interest rate, decreases real aggregate output, decreases the real wage rate, and increases employment.
• C) decreases the real interest rate, increases real aggregate output, increases the real wage rate, and decreases employment.
• D) decreases the real interest rate, increases real aggregate output, increases the real wage rate, and increases employment.
• E) decreases the real interest rate, decreases real aggregate output, decreases the real wage rate, and increases employment.

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Definitions:

Learned Helplessness

is a condition in which a person suffers from a sense of powerlessness, arising from persistent failure to succeed or lack of control over their environment.

Seligman

A psychologist known for his work in positive psychology and studies on learned helplessness and optimism.

Cognitive Process

The mental activities related to thinking, understanding, learning, and remembering.

Reacting

The process of responding to stimuli or events in the environment.