A theory suggesting that price stickiness leads to sluggish short-run adjustment of the price level to variations in aggregate demand is known as

Question

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The theory of new Keynesian inflation dynamics suggests that price stickiness causes sluggish short-run adjustment of the price level in response to aggregate demand. Option A refers to new Keynesian models with flexible prices, while options C and D both refer to real-business-cycle models, which do not incorporate price stickiness as a key feature.

A Theory Suggesting That Price Stickiness Leads to Sluggish Short-Run