Which of the following is inconsistent with Keynesian models of business cycles?
A) wage and price stickiness
B) coordination failure
C) multiple equilibria
D) efficient market allocation
E) the need for stabilization policy

Question

Quizplus · Accepted Answer

Efficient market allocation is inconsistent with Keynesian models of business cycles because these models assume that markets may not always allocate resources efficiently due to various factors such as slow adjustment of wages and prices, coordination failure, and multiple equilibria. Keynesian models emphasize the need for government intervention and stabilization policy to address these market failures and reduce fluctuations in output and employment.

Which of the Following Is Inconsistent with Keynesian Models of Business