New Keynesian Theorists Argue That

question 5

Multiple Choice

New Keynesian theorists argue that

• A) price and wage adjustments in response to policy changes often overcompensate and cause further price disruptions.
• B) prices and wages may not be free to adjust in response to policy changes.
• C) unions and big business have considerable power and often choose not to change wages and prices so as to deliberately offset policy changes enacted by the government.
• D) the Fed and the Congress rarely do what they say they will do,so one should never listen to what they say.
• E) new classical rational expectations theories about how expectations are formed are completely wrong.

---

Definitions:

Voluntarily Discuss

To choose to talk about something without being compelled or required to do so.

Problems

Obstacles or issues that need to be resolved or dealt with.

Members' Goals

Refers to the objectives or aims that individuals within a group seek to achieve through their participation.

Assessment

The process of evaluation or analysis of something to determine its value, nature, qualities, or importance.