ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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According to the New Keynesian model, after a negative shock to output, efficiency could be restored
quickly if
A. the govemment decreases expenditures or the central bank increases its target rate.
B. the govemment decreases expenditures or the central bank decreases its target rate.
C. the govemment increases expenditures or the central bank decreases its target rate.
D. the govermment leaves expenditures unchanged and the central bank decreases the money supply.
E. the government increases expenditures or the central bank increases its target rate.
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Transcribed Image Text:According to the New Keynesian model, after a negative shock to output, efficiency could be restored quickly if A. the govemment decreases expenditures or the central bank increases its target rate. B. the govemment decreases expenditures or the central bank decreases its target rate. C. the govemment increases expenditures or the central bank decreases its target rate. D. the govermment leaves expenditures unchanged and the central bank decreases the money supply. E. the government increases expenditures or the central bank increases its target rate.
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