Which of the following is true about new Keynesian economics?
I. It incorporates monetarist ideas about the importance of monetary policy.
II. It incorporates new classical ideas about the importance of aggregate supply.
III. It includes a greater use of microeconomic analysis in macroeconomic analysis than Keynesian economics.
IV. Unlike Keynesian economics, it is opposed to active stabilization policies.
A) I and III only
B) II and III only
C) I, II, and III only
D) I, II, III, and IV

Question

Which of the following is true about new Keynesian economics? 
I. It incorporates monetarist ideas about the importance of monetary policy.
II. It incorporates new classical ideas about the importance of aggregate supply.
III. It includes a greater use of microeconomic analysis in macroeconomic analysis than Keynesian economics.
IV. Unlike Keynesian economics, it is opposed to active stabilization policies.
A) I and III only
B) II and III only
C) I, II, and III only
D) I, II, III, and IV

Quizplus · Accepted Answer

New Keynesian economics incorporates monetarist ideas about monetary policy and new classical ideas about aggregate supply, and it uses more microeconomic analysis than traditional Keynesian economics. However, it does not oppose active stabilization policies.

Which of the Following Is True About New Keynesian Economics