Critics of the So-Called DSGE Models Point Out That These

Multiple Choice

Critics of the so-called DSGE models point out that these models

A) do not incorporate rational expectations
B) assume that wages and prices adjust slowly so markets take a long time to clear
C) ignore the fact that the economy can be hit by random shocks
D) make the unrealistic assumption that people have a well-designed, long?term plan and can therefore adapt to unexpected shocks in a rational, consistent way
E) all of the above