Employing the New Keynesian Concepts of "Macroeconomic Externality" and "Coordination

question 41

Multiple Choice

Employing the New Keynesian concepts of "macroeconomic externality" and "coordination failure": if nominal aggregate demand and marginal cost fall by the same proportion,society ________ afford to compensate firms for the profit they lose when they ________.

• A)can,bear the menu costs of changing prices
• B)can,hold prices constant
• C)cannot,bear the menu costs of changing prices
• D)cannot,hold prices constant

---

Definitions:

Achievement Motivation

The drive or desire to accomplish goals, excel, and attain success as defined by the individual or society.

Immediate Gratification

The desire to experience pleasure or fulfillment without delay or deferment, often prioritizing short-term rewards over long-term outcomes.

Competitive Occupations

Jobs or careers where individuals or organizations compete against others for resources, recognition, or achievement.

Subjective Conscious Experience

Individual perception and personal awareness of feelings, thoughts, and sensations, unique to each person.