New Keynesian explanations for sticky prices and wages include
a. menu costs.
b. efficiency wages.
c. insider-outsider distinctions.
d. productivity shocks.
e. all but d.
E
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According to Keynes, the consumption-income relationship is shown as C = a + bYD. Therefore, the saving-income relationship is
a. S = a + (1 ? b)YD. b. S = ? a + (1 ? b)YD. c. S = a + (1 ? b)/YD. d. S = ? a + (1? b)/YD.
If everyone agrees to a change, then the change will be a Pareto Superior move
a. True b. False
Suppose you have four choices—go to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is
A) the value of the book not read. B) the value of the television program not watched. C) the value of the concert that you didn't attend. D) the value of the activity that you would have selected if you hadn't gone to the movie.
Which effect of a price change moves the consumer along the same indifference curve to a point with a new marginal rate of substitution?
a. the budget effect b. the preference effect c. the substitution effect d. the income effect