SOLVED

11) Credibility is important to successful anti-inflationary policy in ________. A) new Keynesian theory. B) traditional Keynesian theory. C) real business cycle theory. D) post classical theory 12) Credibility is not important in ________. A) new Keynesian and traditional Keynesian theory. B) real business cycle and traditional Keynesian theory. C) real business cycle and new Keynesian theory. D) traditional Keynesian, new Keynesian and real business cycle theory. 13) The level of income is unchanged in response to unanticipated anti-inflation policy in ________. A) real business cycle theory. B) traditional Keynesian theory. C) new Keynesian theory. D) post classical theory 14) The level of income is unchanged in response to anticipated anti-inflation policy in ________. A) real business cycle theory. B) traditional Keynesian theory. C) new Keynesian theory. D) post classical theory 15) In macroeconomic modelling, as price flexibility increases________. A) the short-run aggregate supply schedule will get flatter. B) the short-run aggregate supply schedule will get steeper. C) the short-run aggregate supply schedule will shift to the right. D) the short-run aggregate supply schedule will shift to the left. 16) Expansionary policy only leads to inflation, but does not raise output in ________. A) traditional Keynesian theory. B) new Keynesian theory. C) real business cycle theory. D) traditional Keynesian, new Keynesian and real business cycle theory. 17) The management of expectations has increased in importance in policymaking in recent decades with the rise of________. A) traditional Keynesian theory. B) institutionalist theory C) torsion theory. D) new Keynesian theory. 18) No distinction is made between the effects of anticipated and unanticipated policy in ________. A) traditional Keynesian theory. B) new Keynesian theory. C) real business cycle theory. D) traditional Keynesian and real business cycle theory. 19) The zero-lower-bound problem develops when ________. A) real interest rates fall close to zero. B) nominal interest rates fall close to zero. C) the difference between real and nominal interest rates approaches zero. D) the sum of real and nominal interest rates approaches zero. 20) Reductions in inflation have no cost in terms of lower output in ________. A) traditional Keynesian theory. B) new Keynesian theory. C) real business cycle theory. D) traditional and new Keynesian theory.