Which of the following models relies on emphasizing the importance of sticky wages and prices?
A)the monetarist model
B)the new classical model
C)the real business cycle model
D)the new Keynesian model

Question

Quizplus · Accepted Answer

The new Keynesian model emphasizes the importance of sticky wages and prices in explaining economic fluctuations, and seeks to integrate Keynesian ideas about market imperfections with the principles of rational expectations and optimizing behavior of the new classical school. The monetarist model emphasizes the role of money supply in determining macroeconomic outcomes, the new classical model emphasizes the importance of rational expectations and market clearing, and the real business cycle model emphasizes the role of exogenous technological shocks in generating fluctuations.

Which of the Following Models Relies on Emphasizing the Importance