47) In the new Keynesian model, an increase in productivity will cause ________.

ID: 1098878 • Letter: 4

Question

A) a leftward shift in short-run and long-run aggregate supply.

B) a rightward shift in short-run and long-run aggregate supply.

C) a leftward shift in short-run aggregate supply and rightward shift in long-run aggregate supply

D) a rightward shift in short-run aggregate supply and a leftward shift in long-run aggregate supply.

48) Critics of real business cycle analysis suggest that the persuasiveness of the model may be limited by the existence of ________.

A) flexible wages and prices.

B) rising wages.

C) voluntary unemployment.

D) labor hoarding.

49) Every six weeks, the Federal Open Market Committee (FOMC) meets to discuss monetary policy. This discussion is mainly focused on ________.

A) information of the equilibrium real interest rate from the past three years

B) the current month's release of the CPI by the BLS

C) the three year projections of the equilibrium real interest rate

D) the past 18 month history and future 18 month projections of the discount rate

E) none of the above

1) D) a rightward shift in short-run aggregate supply and a leftward shift in long-run aggregate supply.

2) D) labor hoarding.

3) E) none of the above

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