Which theory is consistent with the notion that the short-run aggregate supply curve may be vertical after all?
A) Keynesian theory
B) new classical economics
C) new Keynesian theory
D) real business cycle theory

Question

Quizplus · Accepted Answer

New classical economics emphasizes the importance of flexible prices and wages in determining economic outcomes. Therefore, it is consistent with the idea that the short-run aggregate supply curve can be vertical if prices and wages adjust quickly to changes in the economy.

Which Theory Is Consistent with the Notion That the Short-Run