The "New Keynesian" macroeconomics centered on
A)the assumption of continuous market-clearing.
B)the importance of technological shocks.
C)the imperfectness of the information held by economic decision-makers.
D)the rational reasons for slow price and wage adjustment.

Question

Quizplus · Accepted Answer

"New Keynesian" macroeconomics focuses on the rational reasons for slow price and wage adjustment, and is based on the assumption of imperfect information held by economic decision-makers. It does not assume continuous market-clearing, and while it acknowledges technological shocks, they are not its central focus. Therefore, the correct choice is D.

The "New Keynesian" Macroeconomics Centered on