In New Keynesian Macroeconomics,when Marginal Costs Are Too Sticky to Change

question 25

Multiple Choice

In New Keynesian macroeconomics,when marginal costs are too sticky to change in proportion to nominal aggregate demand,prices ________ and so menu costs ________ needed to explain business cycles.

• A)are also sticky,are
• B)are also sticky,are not
• C)are still perfectly flexible,are
• D)are still perfectly flexible,are not

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