In the New Keynesian Model, an Increase in Current Total

question 3

Multiple Choice

In the New Keynesian model, an increase in current total factor productivity

• A)increases output and increases employment.
• B)increases output and increases the real interest rate.
• C)decreases output and increases the real interest rate.
• D)decreases output and decreases employment.
• E)does not affect output and decreases employment.

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Definitions:

Recency Bias

is the tendency to weigh recent events more heavily than older ones when making decisions or evaluations.

Individual's Performance

The level of productivity and efficiency demonstrated by an individual in executing their tasks or responsibilities.

Latest Behaviours

The most recent patterns of action or conduct observed within individuals or groups.

Fringe Benefits

Additional benefits, beyond a salary or wage, offered by employers to employees, such as health insurance, retirement plans, and paid time off.