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:

Demand

The desire and ability of consumers to purchase goods or services at a given price.

Safety Regulations

Standards and rules established to ensure the physical and psychological well-being of individuals in various environments.

Performance Appraisals

Systematic evaluations of an employee's job performance over a specific period, used to determine the need for training, promotions, or other employment decisions.

Substitute

An alternative option or replacement for someone or something.