Which of the following thoughts do the Keynesian and the new Keynesian economists share?
A) The belief that wages and prices are not flexible in the short run
B) The belief that the aggregate supply curve is always a horizontal line
C) The belief that the government's role in the economy should be minimized
D) The belief that the natural rate of unemployment in an economy is always zero
E) The belief that prices are constant and that changes in aggregate expenditures determine equilibrium real GDP

Question

Quizplus · Accepted Answer

Both Keynesian and new Keynesian economists share the belief that wages and prices are not flexible in the short run, which can lead to sticky prices and wages that result in unemployment and economic downturns. However, they differ in their proposed solutions to these issues.

Which of the Following Thoughts Do the Keynesian and the New