According to Some New Keynesian Theories, One Possible Rationale for Active

question 119

Multiple Choice

According to some New Keynesian theories, one possible rationale for active policy making is

• A) flexible prices.
• B) sluggish adjustment of the price level in response to changes in aggregate demand
• C) people are not rational and so do not react to incentives.
• D) growing competition in U.S. product markets.

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Definitions:

Initial Value Method

An accounting approach where investments are recorded at their cost at the time of acquisition without adjustment for market changes.

Noncontrolling Interest

The portion of equity in a subsidiary not owned by the parent company, reflecting the equity interest of minority shareholders.

Consolidated Income Statement

A consolidated income statement is a financial statement that aggregates the financial performance of a company and its subsidiaries.