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

Quizplus · Accepted Answer

New Keynesian economics incorporates monetarist ideas about monetary policy (I) and new classical ideas about aggregate supply (II). It also uses more microeconomic analysis in macroeconomic contexts (III). However, it does not oppose active stabilization policies, unlike what is stated in IV.

Which of the Following Is True About New Keynesian Economics