Which of the following schools of thought reject the simple fixed-price model in favor of a model in which the aggregate supply curve is relatively flat at low levels of real GDP and slopes upward as real GDP approaches its potential level?
A)The new Keynesian economists
B)The monetarists
C)The traditional classical economists
D)The new classical economists
E)The Marxists

Question

Quizplus · Accepted Answer

The new Keynesian economists reject the simple fixed-price model and argue for a more complex model in which the aggregate supply curve is relatively flat at low levels of real GDP and slopes upward as real GDP approaches its potential level. This is due to the presence of sticky wages and prices in the short run, which prevent firms from adjusting output in response to changes in demand.

Which of the Following Schools of Thought Reject the Simple