A primary assumption of new classical economics is:
A) wages and prices are not flexible.
B) an upward sloping aggregate demand curve.
C) over the long run the economy will operate at the natural rate of unemployment.
D) all of the above.

Question

Quizplus · Accepted Answer

New classical economics assumes that, over the long run, the economy operates at the natural rate of unemployment, reflecting the idea that markets, including labor markets, clear and that wages and prices adjust to ensure this outcome.

A Primary Assumption of New Classical Economics Is