SOLVED

11) In the new Keynesian model, if an aggregate demand increase is unanticipated, then ________. A) aggregate demand will not change. B) short-run aggregate supply will shift up immediately C) short-run aggregate supply will shift down immediately D) there is no immediate effect on expectations about future inflation 12) In the new Keynesian model, the effects on output of an anticipated aggregate demand shock are________. A) less than if that event was unanticipated. B) greater than if that event was unanticipated. C) the same as would develop if that event was unanticipated. D) independent of whether or not that event is anticipated or unanticipated. 13) In the new Keynesian model, the immediate effect on inflation of an anticipated aggregate demand shock is ________. A) less than if that event was unanticipated. B) greater than if that event was unanticipated. C) the same as would develop if that event was unanticipated. D) independent of whether or not that event is anticipated or unanticipated. 14) In the new Keynesian model, the ultimate effect on inflation of an anticipated aggregate demand shock is ________. A) less than if that event was unanticipated. B) greater than if that event was unanticipated. C) the same as would develop if that event had never occurred D) independent of whether or not that event is anticipated or unanticipated. 15) In the new Keynesian model, the ultimate effect on output of an anticipated aggregate demand shock is ________. A) less than if that event was unanticipated. B) greater than if that event was unanticipated. C) the same as would develop if that event had never occurred D) dependent on whether or not that event is temporary or permanent 16) Research supporting the new Keynesian model finds that prices are ________. A) slow to adjust to aggregate demand shocks B) changed very frequently C) changed only infrequently D) not as flexible as wages 17) Suppose a tax cut that had been anticipated by households and businesses doesn’t happen. Describe a new Keynesian analysis of the consequences of this “event.” 18) In the long run, does it matter whether a policy action was anticipated or not?