New Keynesian Economics

Multiple Choice

New Keynesian economics

A) favor stabilization policies that shift the short-run aggregate supply curve to keep the economy operating close to its potential output.
B) advocates policies that increase wage and price flexibility so that the economy can self-correct quickly.
C) stresses the stickiness of prices and the need for activist stabilization policies through the aggregate demand management policies to move the economy to its potential output.
D) stresses the importance of operating at potential output and with shifting the long-run aggregate supply curve to the right.