Suppose there are five goods in the economy, A-E. The current-year quantity of each is 10A, 20B, 30C, 40D, and 50E. Current-year prices are $1 for each unit of A, $2 for each unit of B, $3 for each unit of C, $4 for each unit of D, and $5 for each unit of E. Base-year prices are $1 for each good. Real GDP in the current year equals

________: level of input use where the marginal value product equals the marginal input cost

Fill in the blank(s) with correct word

A theory suggesting that price stickiness leads to sluggish short-run adjustment of the price level to variations in aggregate demand is known as

A. real-business-cycle inflation dynamics. B. real-business-cycle fixed-price business cycles. C. new Keynesian flexible-price business cycles. D. new Keynesian inflation dynamics.