In the New Keynesian Rational Expectations Model, When the Nominal

question 42

Multiple Choice

In the New Keynesian Rational Expectations model, when the nominal interest rate is constant forever

• A)there are many equilibria, but each equilibrium satisfies the Fisher relation in the long run.
• B)there is one equilibrium, which does not satisfy the long-run Fisher relation.
• C)there are two equilibria, both of which satisfy the long-run Fisher relation.
• D)there are many equilibria, none of which satisfy the long-run Fisher relation.
• E)there is one equilibrium, and it satisfies the long-run Fisher relation.

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