Which of the Following Is True When a Financial Friction

question 8

Multiple Choice

Which of the following is true when a financial friction is included in the Smets-Wouters DSGE model?
i. Consumption rises
ii. Investment rises
iii. Inflation falls

• A) iii
• B) i
• C) i and ii
• D) ii
• E) i and iii

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Definitions:

Esteem Needs

According to Maslow's hierarchy of needs, these are the fourth level and include self-esteem, confidence, respect by others, and respect for others.

Theory X

A management theory assuming that employees are inherently lazy and will avoid work if they can.

Behaviour Motivation

The drive behind individuals' actions, influenced by internal desires and external rewards.

Theory Y

A management concept that assumes employees are intrinsically motivated, enjoy their job duties, and work to better themselves without direct supervision.