In the new Keynesian view, the larger the proportion of firms in the economy with sticky prices the less effective is fiscal policy in increasing output. The steeper the SRAS curve will be. the greater the increase in the price level for a given shift in the AD curve. O the flatter the SRAS curve will be.

In the new Keynesian view, the larger the proportion of firms in the economy with sticky prices the less effective is fiscal policy in increasing output. The steeper the SRAS curve will be. the greater the increase in the price level for a given shift in the AD curve. O the flatter the SRAS curve will be.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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