Like the New Classical Model,the New Keynesian Model

question 19

Multiple Choice

Like the new classical model,the new Keynesian model

• A)concludes that anticipated policies do not affect aggregate output and unemployment.
• B)distinguishes between the effects of anticipated versus unanticipated policy,with anticipated policy having a greater effect.
• C)distinguishes between the effects of anticipated versus unanticipated policy,with unanticipated policy having a greater effect.
• D)assumes that wages and prices are perfectly flexible with respect to changes in the expected price level.

Recognize the conditions under which a purely competitive firm will achieve profit maximization or reach a break-even point.

Identify the short-run supply curve of a purely competitive firm and its relation to marginal cost and average variable cost.

Understand the concept of elasticity of demand as it applies to purely competitive markets.

Distinguish between the market demand curve and the demand curve faced by an individual firm in pure competition.