According to the Keynesian model, the short-run aggregate supply (SRAS) curve is horizontal when
A) prices react to an aggregate demand shock but real Gross Domestic Product (GDP) does not.
B) there are no unemployed resources and wages do not change when prices change.
C) there are unemployed resources and prices do not fall when aggregate demand falls.
D) real Gross Domestic Product (GDP) is at full capacity but prices are not flexible.
C
Economics
You might also like to view...
For the monopoly shown in the figure above, the profit maximizing output is
A) 4 units per day. B) 5 units per day. C) 6 units per day. D) 10 units per day.
Economics
The part of the balance of payments that records purchases of assets a country has made abroad and foreign purchases of assets in the country is the
A) capital account. B) current account. C) financial account. D) statistical discrepancy account.
Economics