CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

The macroeconomic view that the money wage rate and the prices of goods and services are inflexible is the ______.

A. Keynesian view
B. Neoclassical view
C. New Classical view
Correct Answer: C

The Keynesian view holds that the money wage rate is sticky in the downward direction. The New Classical view holds that not only is the money wage rate sticky but that prices of goods and services are also sticky.

User Contributed Comments 3

User Comment
DannyZhou Keynesian view: downward sticky money wage rate
new classical view: downward sticky money wage rate and prices of goods and services
Marinov This is the precise opposit of what the textbook says. Directly from textbook: "In contrast to the New Classical school the Neo-Keynesian school assumes slow-to-adjust (prices and wages).
tennis @Marinov: that's exactly what the book says. The new classical view says that the prices are sticky.
You need to log in first to add your comment.