In the New Keynesian Model,an Increase in Current Total Factor

question 11

Multiple Choice

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

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

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Definitions:

Expectancy Theory

A psychological theory that explains motivational forces by weighing the perceived values of outcomes against the perceived likelihoods of achieving them.

Low Self-efficacy

The belief in one's inability to achieve goals or handle situations effectively.

Reiss Profile

A psychological tool that identifies the underlying motivations and needs of individuals to help explain why people behave the way they do.

Basic Desires

Fundamental motivations or drives that influence human behavior and decision-making.