According to New Keynesians, Why Can Firms Increase Output in the Short

question 25

Essay

According to New Keynesians, why can firms increase output in the short run in response to higher prices?

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Definitions:

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body has to stress, proposed by Hans Selye.

Chronic Stressor

A persistent source of stress that continues over an extended period, potentially leading to long-term health and psychological issues.

Discriminated Against

Treated unjustly or unfavorably on the basis of certain characteristics, such as race, age, gender, or disability.

Restless

Characterized by an inability to rest or relax, often resulting from anxiety, boredom, or a desire for change or activity.