In the Stylized DSGE Model with Sticky Prices, How Does $F F R \downarrow \rightarrow A D \uparrow \rightarrow \pi \uparrow \rightarrow \left( \frac { W } { P } \right) \uparrow$

question 87

Multiple Choice

In the stylized DSGE model with sticky prices, how does contractionary monetary policy shock affect the labor market?

• A) \(F F R \downarrow \rightarrow A D \uparrow \rightarrow \pi \uparrow \rightarrow \left( \frac { W } { P } \right) \uparrow\)
• B) \(G \downarrow \rightarrow A D \downarrow \rightarrow \pi \downarrow \rightarrow L ^ { s } \downarrow\)
• C) \(F F R \uparrow \rightarrow A D \downarrow \rightarrow Y \downarrow \rightarrow L ^ { d } \downarrow\)
• D) \(F F R \downarrow \rightarrow A D \uparrow \rightarrow Y \uparrow \rightarrow L ^ { s } \uparrow\)
• E) \(\tau \uparrow \rightarrow A D \uparrow \rightarrow Y \uparrow L ^ { D } \uparrow\)

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