Which of the following assumptions is found in Friedman's model but not in the new classical model?
A) supply of labor depends on expected real wage
B) workers gradually adapt their expectations of the price level to the actual price level
C) imperfect information
D) market-clearing labor market

Question

Quizplus · Accepted Answer

Friedman's model assumes that workers gradually adapt their expectations of the price level to the actual price level, which is not an assumption in the new classical model.

Which of the Following Assumptions Is Found in Friedman's Model