Which of the Following Is True About New Keynesian Economics

question 54

Multiple Choice

Which of the following is true about new Keynesian economics?
I. It incorporates monetarist ideas about the importance of monetary policy.
II. It incorporates new classical ideas about the importance of aggregate supply.
III. It includes a greater use of microeconomic analysis in macroeconomic analysis than Keynesian economics.
IV. Unlike Keynesian economics, it is opposed to active stabilization policies.

• A) I and III only
• B) II and III only
• C) I, II, and III only
• D) I, II, III, and IV

Understand the role of bond ratings in assessing default risk.

Describe the impacts of interest rate changes on bonds' market value.

Grasp the concepts of bond coupon payments and how they're determined.

Understand the taxation of imputed interest on zero-coupon bonds.

---

Definitions:

Contingent Liability

A potential obligation that may arise depending on the outcome of an uncertain future event, which is not confirmed at the date of the financial statements.

Fair Value

What would be pocketed from an asset sale or the price to offload a liability during a methodical engagement with market individuals on the day of measurement.

Present Obligation

A duty or responsibility to act or perform in a certain way.

Goodwill

The intangible asset that arises when a buyer acquires an existing business but pays more than the fair market value of the net assets.