Question from Past Macroeconomics Qualifying Exam (Fall, 2002 - Question five) at George Mason UniversityEdit
How would a one-time increase in the price level affect output according to:
- a. A neoclassical model with rational expectation?
- b. A standard Keynesian model?
- c. A neo-Keynesian model with real rigidities in financial markets?
- d. A monetarist model?
- e. Have any of these models been empirically successful in explaining the relationship between price level increases and output? Explain.
- Other Macro Prelims