In the New Keynesian Rational Expectations Model, in the Output

question 39

Multiple Choice

In the New Keynesian Rational Expectations Model, in the output demand relationship,

• A) output increases when the nominal interest rate increases.
• B) the difference between current output and future output increases when the nominal interest rate increases.
• C) the difference between current output and future output increases when the natural real interest rate increases.
• D) the difference between current output and future output increases when anticipated future inflation decreases.
• E) the difference between current output and future output increases when the actual real interest rate increases.