If There Are Total Factor Productivity Shocks in the New

question 81

Multiple Choice

If there are total factor productivity shocks in the New Keynesian model, and the central bank always reduces the output gap to zero

• A)the New Keynesian model will produce the same data as the real business cycle model only if the central bank pegs the price level in the real business cycle model.
• B)the New Keynesian model will produce the same data as the real business cycle model.
• C)average labour productivity is countercyclical.
• D)employment is constant.
• E)employment is countercyclical.

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Definitions:

Total Expense Ratio

It quantifies the total cost of fund management and operating expenses, expressed as a percentage of the fund’s total assets.

Gross Return

The total return on an investment before any deductions are made for costs or expenses.

Managed Investment Companies

Firms that invest pooled funds from clients, taking on the responsibility of investment decisions and management for those funds.

Closed-end Funds

Investment funds that have a fixed number of shares which are not redeemable from the fund. Instead, the shares can be purchased or sold only in the market, at their current market price.