Which of the following is a characteristic of the 'New Keynesian' models used for monetary policy analysis?
A. They assume continuous market clearing and flexible prices
B. They combine intertemporal optimisation, rational expectations and nominal rigidities
C. They ignore expectations completely
D. They rely only on adaptive expectations
Answer: Option B
Solution (By JKSSB Mock Tests)
Modern New Keynesian DSGE models used for policy analysis feature optimising households and firms, rational expectations, and some form of nominal rigidity (sticky prices or wages).
The concept of 'Degrowth' in ecological economics advocates:
A.Only growth in developing countries
B.The complete abandonment of all economic activity
C.A planned reduction of energy and resource throughput in high-income countries to bring the economy within ecological limits while improving well-being
Explanation:
Degrowth is a school of thought that calls for a democratically planned downscaling of production and consumption in over-consuming countries in order to achieve ecological sustainability and social justice.
Explanation:
A progressive tax is one where the tax rate increases with the increase in the taxable amount. Personal income tax in India is progressive with different slabs.
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