Which of the following schools of thought believes that wages and prices are rigid in the short run?
A)Keynesians and new Keynesians
B)Only monetarists
C)Only new classical economists
D)Monetarists and new classical economists
E)Monetarists and Keynesians

Question

Quizplus · Accepted Answer

Both Keynesians and new Keynesians believe that wages and prices are rigid or sticky in the short run, which leads to market inefficiencies and the need for government intervention to stimulate demand and increase employment. Monetarists and new classical economists, on the other hand, emphasize the role of money supply and aggregate supply in determining output and prices, and typically assume that markets adjust quickly to changes in economic conditions.

Which of the Following Schools of Thought Believes That Wages