In the Model with Keynesian Sticky Wages and Prices, If

question 12

Multiple Choice

In the model with Keynesian sticky wages and prices, if the representative consumer is working too much given the market real wage, then

• A)The monetary authority should take actions that will reduce the price level.
• B)The monetary authority should take actions that will increase the price level.
• C)The competitive equilibrium is Pareto optimal.
• D)The representative firm should be taxed.
• E)The representative consumer should change his or her preferences.

---

Definitions:

Margin And Turnover

Financial metrics where margin refers to the difference between sales and the cost of goods sold, and turnover involves the rate at which inventory is sold or replaced.

Profit Center

A business segment whose manager has control over cost and revenue but has no control over investments in operating assets.

Revenue

The complete sum of revenue a business earns from sales of goods or provision of services within a designated timeframe.

Controlling Costs

The process of monitoring, managing, and regulating expenses to operate within the budget and maximize profitability.