Much of Macroeconomic Theory Has Been Developed Under the Simplifying

question 77

Multiple Choice

Much of macroeconomic theory has been developed under the simplifying assumption that relative prices and wages are fixed,or equivalently that the economy is producing one good using one input (labor) with one wage rate.Such an assumption is clearly ________ of New Keynesian macroeconomics,given its emphasis on the importance of ________ in explaining business cycles.

• A)part,profit maximization
• B)part,staggered contracts
• C)not part,profit maximization
• D)not part,staggered contracts

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Definitions:

Hypothyroidism

A condition in which the thyroid gland doesn't produce enough thyroid hormone, leading to a slowdown in bodily functions.

PO

An abbreviation used in prescriptions, standing for "per os," which is Latin for "by mouth," indicating oral administration.

Tagamet

A brand name for cimetidine, a medication used to treat and prevent certain types of ulcers and to reduce stomach acid.

Gastric Reflux

The backward flow of stomach acid into the esophagus, leading to discomfort and potential damage.