If aggregate demand fluctuates, the new Keynesian model claims that GDP will fluctuate but aggregate price level

Fantastic news! We've Found the answer you've been seeking!

Question:

If aggregate demand fluctuates, the new Keynesian model claims that GDP will fluctuate but aggregate price level will remain stable. Explain why this is so.

Related Book For answer-question

Macroeconomics

ISBN: 978-0138014919

12th edition

Authors: Robert J Gordon

See More Books

Posted Date: Feb 16, 2024 11:19 PM

See More Questions

What is the net present value of a project with the following cash flows and a required return of 12%? Year 0, cash flow -$28,900, year 1 $12,450, year 2 $19,630, year 3 $2,750
1. In the classical model, it is thought that the long-run: A. and short-run aggregate supply curves are both upward sloping. B. aggregate supply curve is vertical and the short-run aggregate supply...
You have been provided with the description of a programming language, J, intended for scripting applications. Its syntax is similar to a cut-down version of Java in that it consists of function...
- You have identified several risks on your project for which purchasing insurance is a possibility. The insurance company your firm uses has quoted reasonable rates, and your analysis shows that...
What is the relationship between (the probability of committing a Type II error) and the power of the test?
An electron microscope uses electrons of energy 70keV. Find the wavelength of these electrons.
Define the Haar's wavelets function $\psi(t)$ and verify that for every $t$, \[si(t)= \begin{cases}1, & 0 \leq t
At Western University the historical mean of scholarship examination scores for fresh-man applications is 900. A historical population standard deviation = 180 is assumed known. Each year, the...
Show how the buying process occurs in the consumer. Review some of the steps in the buying process, stories like: felt need pre-purchase activity purchase decision Post-purchase feelings Explain and...
A factory has five assembly lines. Each assembly line is down (not working) p percent of the time. What must p equal so that there is a 95 percent chance that at least one assembly line is working?
Given a list (65, 90, 10, 74, 58, 78, 75, 92, 94, 68) and a gap array of (4, 3, 1 What is the list after shell sort with a gap value of 4? (comma between values) What is the resulting list after...
A small hydro turbine is placed between tank 1 and tank 2. The water is flowing at a mass flow rate of 2.2 kg/s from tank 1 to tank 2. There are three pipe sections between the two tanks as follow:...
1. Figure (a) shows the Staubli 6R robot, with its zero configuration shown in Figure (b). Draw appropriate link reference frames, and derive the Denavit-Hartenberg parameters. STUBLI TX40 STUBLI (a)...
10. At a certain point at the beach, the coast line makes a right angle bend, as shown in part (a) of the below figure. The flow of salt water in this bend can be approximated by the potential flow...
A coolant is transported in a pipe with external wall temperature of -30 C and with outer diameter of 10 cm. The tube is thermally isolated by two layers: 1) an internal layer of foamed polypropylene...
Fig. shows a plate cam with translatingin-line roller follower and a plate cam with translating offset roller follower. R=100 mm, OA=20 mm, e=10 mm, r =10 mm. Indicate the pressure angles and the...
Firm Y and Firm Z are engaged in an innovation mega-game. Each firm knows the entire structure of the game, including both its own payoffs and the payoffs to the other firm from the various possible...
Explain why it is not wise to accept a null hypothesis.
Starting from the situation depicted in Figure 2-3, assume that business firms produce an additional $500,000 worth of goods, of which only $450,000 are bought during the current year. What are the...
Explain the difference between the aggregate demand curve developed in this chapter and the demand curve for a product (for example, movies) used in microeconomics.
In what ways are the Friedman-Phelps fooling model and the Keynesian model similar? In what ways do they differ?
Suppose a job enrichment effort in one plant of a manufacturing firm is judged to be very successful. You are the corporate change agent responsible for the project, and you wish to diffuse it to...
Describe an example of resistance to change that you have observed. Why did it occur?
What qualities would the ideal gatekeeper possess to facilitate the communication of technical information in the firm?

If aggregate demand fluctuates, the new Keynesian model claims that GDP will fluctuate but aggregate price level

Question:

Expert Answer:

The New Keynesian model suggests that the aggregate price level might exhibit limited fluctuations i... View the full answer

Macroeconomics

Students also viewed these economics questions