Exam 10: Classical and Keynesian Macro Analyses

-Refer to the above figure. Which of the graphs is consistent with the Keynesian short-run aggregate supply curve?

The full-employment rate of output can

-Refer to the above figure. If the aggregate demand curve shifts beyond AD₅, which of the following would we NOT expect?

Some economists believe that a positive aggregate demand shock to an economy with large amounts of excess capacity and unemployment does not necessarily cause an increase in prices. Economists who adhere to this belief are followers of

According to the Keynesian model, the short-run aggregate supply (SRAS)curve is horizontal when

Which of the following is a TRUE statement?

Say's law says that

According to the classical theory, the aggregate supply curve is

The Keynesian portion of the short-run aggregate supply (SRAS)curve

The idea that "supply creates its own demand" is attributed to which of the following economists?

The short-run aggregate supply curve would shift and the long-run aggregate supply curve would remain fixed if

According to the classical model, an increase in aggregate demand would

In the Keynesian model, to understand the determination of income and employment it is necessary to understand

One key assumption of the classical model is

-Refer to the above figure. The classical aggregate supply curve is represented by ________ and the Keynesian short-run aggregate supply curve is represented by ________.

In the classical model, real Gross Domestic Product (GDP)per year is

If there is a change in the U.S. endowment of factors of production, then there would be

-Refer to the above figure. Suppose the current aggregate demand is represented by AD₂. If aggregate demand falls to line AD₃, then

The simple Keynesian model assumes that

Say's law states that