1. Optimal fiscal policy relies on the (a) Friedman rule (b) Laffer curve (c) model's productivity shocks (d) Federal Reserve Bank 2. In the short-run, money (a) does not enter into the representative...

1. Optimal fiscal policy relies on the

(a) Friedman rule

(b) Laffer curve

(c) model's productivity shocks

(d) Federal Reserve Bank

2. In the short-run, money

(a) does not enter into the representative consumer's utility function.

(b) is non-neutral (because prices are rigid/sticky, often for long periods of time).

(c) is the equivalent of holding a "riskless asset."

(d) is used as a proxy for the pricing kernel in the sequential Lagrangian analysis.