Which of the Following Is True from the Perspective of the New

question 84

Multiple Choice

Which of the following is true from the perspective of the New Keynesian school of thought?

• A) Fluctuations in private spending does not affect aggregate demand in an economy.
• B) Investment spending remains relatively constant irrespective of the supply shocks.
• C) Fluctuations in aggregate demand are not the primary source of problem for policymakers.
• D) The government should limit its role to administrative functions.
• E) Monetary and fiscal policies often fail to restore macroeconomic equilibrium.

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