The New Keynesian theory of business cycle compatible with rational expectations? a) No, because firms myopically adjust their production to change in price b) No, it is only compatible with adaptive expectations c) Yes, because the New Keynesian supply curve is derived by profit maximization d) Yes, assuming that both prices and wages are sticky

The New Keynesian theory of business cycle compatible with rational expectations? a) No, because firms myopically adjust their production to change in price b) No, it is only compatible with adaptive expectations c) Yes, because the New Keynesian supply curve is derived by profit maximization d) Yes, assuming that both prices and wages are sticky

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 15P

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