The Main Difference Between the New Keynesian Model and the Basic

question 55

Multiple Choice

The main difference between the New Keynesian model and the basic monetary intertemporal model is that in the New Keynesian model

• A)menu costs are insignificant.
• B)the price level is sticky in the short run.
• C)firms are backward-looking.
• D)wages are sticky in the short run.
• E)prices adjust quickly to equate the supply and demand for goods.

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Definitions:

Stable Traits

Stable Traits are enduring characteristics or qualities that remain consistent across different situations and over time, forming the foundation of an individual's personality.

Trait Activation Theory

A psychological theory proposing that certain situations can activate specific traits which then influence behavior.

Personality Traits

Enduring characteristics that describe an individual's behavior, attitude, and emotional patterns, contributing to their unique personality.

Personality

A combination of emotional, attitudinal, and behavioral response patterns of an individual that is distinct among people, influencing their interactions and reactions to various situations.