'Stickiness' of wages and prices is considered unimportant in which of the following economic models?
A)Keynesian supply and demand model
B)Monetarist model
C)New classical model
D)Real business cycle model

Question

Quizplus · Accepted Answer

The New classical model assumes that wages and prices adjust quickly to changes in supply and demand, so stickiness is not considered important in this model. The Keynesian supply and demand and real business cycle models both do consider stickiness to be important, and while the Monetarist model does not explicitly focus on stickiness, it still assumes that prices adjust slowly in response to changes in the money supply.

'Stickiness' of Wages and Prices Is Considered Unimportant in Which