Which of the following theories is criticized for assuming the money wage rate is not sticky?
A) monetarist cycle theory
B) real business cycle theory
C) Keynesian cycle theory
D) new Keynesian cycle theory

Question

Quizplus · Accepted Answer

Real Business Cycle Theory is criticized for assuming that the money wage rate is not sticky, as it primarily attributes fluctuations in economic cycles to real (in contrast to nominal) shocks, such as changes in technology or resource availability, rather than to monetary or fiscal policy influences. This assumption contrasts with Keynesian perspectives, which emphasize wage and price stickiness as central to understanding economic cycles.

Which of the Following Theories Is Criticized for Assuming the Money