Macro- & Monetary Economics

Prio: Normal, Part II: Keynes, Type: MC, Quiz 2

In Keynesian theory (sticky wage model), monetary and fiscal policy can be used to fight Keynesian unemployment. Both policies

  • Lower the real interest rate
  • Shift the aggregate demand curve to the right
  • Crowd out private investment and consumption
  • Increase the nominal wage
 

Diskussion