The Most Important New Keynesian Assumption That Distinguishes This Theory

question 166

Multiple Choice

The most important new Keynesian assumption that distinguishes this theory from the real-business-cycle theory is the new Keynesian assumption

• A) of a horizontal aggregate demand curve.
• B) of price flexibility.
• C) about the importance of interest rates in determining investment spending.
• D) of a horizontal short-run aggregate curve.

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Definitions:

Disruptive Innovation

An innovation that significantly alters the way that consumers, industries, or businesses operate, often displacing established market-leading firms and products.

Frugal Innovation

The process of reducing the complexity and cost of a good and its production, usually to make it accessible to a larger part of the population.

Cognitive Systems

Advanced computer systems or software models that mimic human thought processes, capable of learning, reasoning, and problem-solving to assist in decision-making.

Supply Chain Analytics

The use of data analysis tools and techniques to improve decision-making processes and efficiency within the supply chain, from procurement to delivery.