According to the Keynesian Model of Nominal-Wage Rigidity

question 27

Multiple Choice

According to the Keynesian model of nominal-wage rigidity,

• A)if actual and expected prices are the same,output gap will be zero.
• B)even if actual and expected prices are the same,output gap will be positive.
• C)even if actual and expected prices are the same,output gap will be negative.
• D)output gap exists because of price misperception.

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Definitions:

Confabulation

The production of fabricated, distorted, or misinterpreted memories about oneself or the world, without conscious intention to deceive.

Priming

A psychological phenomenon in which exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention.

Long-term Potentiation

A long-lasting increase in signal transmission between two neurons that results from their simultaneous activation, often considered a cellular mechanism for learning and memory.

Deep Processing

A method of learning in which information is analyzed in a meaningful way as opposed to merely memorized.