The assumption of imperfect information is critical to
A)the old Keynesian and all New Classical approaches.
B)all New Classical approaches.
C)the Friedman,Phelps,and Lucas New Classical approaches.
D)the real business cycle approach.

Question

Quizplus · Accepted Answer

The assumption of imperfect information is critical to the Friedman, Phelps, and Lucas New Classical approaches. These approaches emphasize the importance of rational expectations and the efficient market hypothesis, which rely on agents having imperfect information and updating their expectations as new information becomes available. The other options either include approaches that do not rely on the assumption of imperfect information or are too narrow in scope to be considered the best choice.

The Assumption of Imperfect Information Is Critical to