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:

Degrees Of Freedom

The number of independent values or quantities that can be assigned to a statistical distribution, often relevant in the calculation of statistics like variance.

Standard Deviation

A quantification of how much spread or variability exists within a group of figures.

Simple Linear Regression

Simple linear regression is a method for predicting a quantitative outcome using a single explanatory variable, based on the linear relationship between them.

Least Squares

A method in statistics for approximating the solution of overdetermined systems, by minimizing the differences between the observed and predicted values.