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Terms of expectations-price flexibilty - potential sources of business cycle fluctiations. Compare them in the traditional keynesian,new...

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Economics

Terms of expectations-price flexibilty - potential sources ofbusiness cycle fluctiations.

Compare them in the traditional keynesian,new keynesian and realbusiness cycle models.

Answer & Explanation Solved by verified expert
4.1 Ratings (738 Votes)
Expectations are generally adaptive in nature In theory of equilibrium Keynes assumed expectations to perfectly reflect the actual scenarios Shortterm expectations originates internally while the long term expectations originates externally to the employment    See Answer
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