Which of the following is a basic difference between the classical model and the Keynesian model in which the Keynesian short-run aggregate supply curve exists?
A) The classical model assumes that the long run aggregate supply curve is vertical, while the Keynesian model assumes the long run aggregate supply curve is horizontal.
B) The classical model assumes that the position of the long run aggregate supply curve is determined by full employment, while the Keynesian model assumes that the long run aggregate supply curve will be to the left of full employment.
C) The classical model assumes that the level of real GDP is supply determined, while the Keynesian model assumes that it is demand determined.
D) The classical model uses real GDP, while the Keynesian model uses nominal GDP.
C
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Corporate profits are taxed by state and local governments, but not by the federal government
Indicate whether the statement is true or false
In the above figure, the average product of labor at point c is
A) 10. B) 5. C) 2. D) None of the above answers is correct.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. b. The GDP Price Index and reserve-related (central bank) transactions remain the same. c. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). d. There is not enough information to determine what happens to these two macroeconomic variables. e. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same.
Gross Domestic Product is equal to the market value of all the goods and services ____________ in a given period of time.
Fill in the blank(s) with the appropriate word(s).