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
Correct Answer:
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