Which of the following is a difference between the Keynesian and classical models?
a. Price stickiness is considered in the Keynesian model but not in the classical model.
b. Input prices are completely flexible in the Keynesian model but are inflexible in the classical model.
c. The overall price level can change in the Keynesian model but not in the classical model.
d. Input prices adjust quickly to economic changes in the Keynesian model but not in the classical model.
a. Price stickiness is considered in the Keynesian model but not in the classical model.
You might also like to view...
In a classical model
A) equilibrium real GDP is demand determined. B) equilibrium real GDP is neither determined by aggregate supply nor by aggregate demand. C) equilibrium real GDP is determined by both aggregate supply and aggregate demand. D) equilibrium real GDP is supply determined.
If Mark tries to purchase a new refrigerator in a perfectly competitive market, then
A) he will have a very limited ability to negotiate over the price. B) he will have only a few sellers available to him. C) he will see large differences in the types of refrigerators sold across sellers. D) he will find himself constantly haggling with sellers over the price. E) None of the above is correct.
Investment spending will decrease when
A) firms become more optimistic about earning future profits. B) the corporate income tax decreases. C) business cash flow decreases. D) the interest rate falls.
Bank customers perceive Internet-only banks as being
A) more secure than physical bank branches. B) a better method for the purchase of long-term savings products. C) better at keeping customer information private. D) prone to many more technical problems.