Home / Expert Answers / Economics / in-the-neo-keynesian-model-used-in-class-what-happens-if-businesses-expect-higher-future-profits-pa875

(Solved): In the Neo Keynesian model used in class, what happens if businesses expect higher future profits ...



In the Neo Keynesian model used in class, what happens if businesses expect higher future profits while inflationary expectat

In the Neo Keynesian model used in class, what happens if businesses expect higher future profits while inflationary expectations decrease simultaneously? Choose all that apply. The price level increases. Real GDP may increase, decrease or remain unchanged. The price level decreases. Real GDP increases. Real GDP decreases. The price level may increase, decrease or remain unchanged.


We have an Answer from Expert

View Expert Answer

Expert Answer


A decrease in inflationary expectations will cause the reverse spiral wage price so that the ri

We have an Answer from Expert

Buy This Answer $5

Place Order

We Provide Services Across The Globe