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ECON 1580: Introduction to EconomicsUNIT 5 Learning JournalProfessor Eddy FotsingUniversity of the People13th May, 2020Although not explicitly mentioned in Chapter 20, John Maynard Keynes is considered afoundational source in the understanding of macroeconomics. After performing researchoutside the textbook, please explain in three well-structured paragraphs the basicprinciples of the New Keynesian Economics and how it addresses perceived limitations toclassic Keynesian theory.The new "Keynesian Economics is a modern macroeconomic school of thought that evolvedfrom classical Keynesian economics". One major disagreement between classic Keynesiantheory and new Keynesian economics is the assumption of how quickly wages and prices adjust.New classical economists believe wages and prices are flexible, and that prices can "clear" themarket demand and supply because wages and prices are flexible, and they can adjust quickly.

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