The new Keynesian approach shares with the new classical approach
A)the assumption of rational expectations.
B)the conclusion that money does not affect output in the short run.
C)the conclusion that only unexpected changes in the money supply affect output in the short run.
D)the assumption that the short aggregate supply curve is vertical.

Question

Quizplus · Accepted Answer

The new Keynesian approach shares with the new classical approach the assumption of rational expectations, which means that individuals and firms use all available information efficiently to forecast future economic variables.

The New Keynesian Approach Shares with the New Classical Approach