In the New Keynesian approach, when money supply is found to increase in an unanticipated fashion, there can be a real expansion in the economy at least for a while. This transitory effect of a money supply change happens on account of

1
contracts predetermining wages
2
wages are flexible and can fluctuate
3
wages are decreasing
4
wages are downward sticky

Sponsored

hivanix.in

Visit

This quiz is brought to you by hivanix.in

🌐 Web App Development

Quick Navigation