What Is the Main Difference Between New Keynesian Economics and Monetarists

question 91

Multiple Choice

What is the main difference between new Keynesian economics and monetarists?

• A)Monetarists support a fixed-price model, whereas new Keynesians believe that prices fluctuate.
• B)Monetarists reject the idea that government intervention can stabilize the economy, whereas new Keynesians support this notion.
• C)Monetarists believe that the aggregate supply curve is always vertical, whereas new Keynesians believe that the aggregate supply curve is always horizontal.
• D)Monetarists believe that an increase in the money supply changes real GDP instantaneously, whereas new Keynesians assume that economic policy operates with a long and variable lag.
• E)Monetarists believe that deficit spending helps stimulate economic growth, whereas new Keynesians advocate a balanced budget.

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Definitions:

Denial

A psychological defense mechanism where a person refuses to accept reality or facts, thereby avoiding a potentially distressful situation.

Kubler-Ross's Typology

A model describing five stages of emotional response to grief and loss, namely denial, anger, bargaining, depression, and acceptance.

Refusing

involves the act of saying no or denying a request, offer, or demand.

Intergenerational Ambivalence

Contradictions that arise both from kinship roles and personal emotions.