New Keynesian Macroeconomic Theory Emphasizes the Role of "Sticky" Prices

question 9

True/False

New Keynesian macroeconomic theory emphasizes the role of "sticky" prices in the economy.

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Definitions:

Frustration-Aggression Principle

A psychological theory suggesting that aggression is caused by blocking, or frustrating, a person's efforts to achieve a goal.

Mere Exposure Effect

The phenomenon by which people tend to develop a preference for things merely because they are familiar with them.

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, also known as the "knew-it-all-along" effect.

Other-Race Effect

This phenomenon describes the tendency to more easily recognize faces of the race that one is most familiar with, which is often their own race.