In the aggregate supply/aggregate demand model, the Classical assumption about flexible prices and the Keynesian assumption...

In the aggregate supply/aggregate demand model, the Classical assumption about flexible prices and the Keynesian assumption about sticky prices is illustrated very differently. Illustrate and explain why.

Expert Solution

Rahul Sunny answered 2 years ago

Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply?

Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply? Potential real GDP increases continuously. Aggregate demand shifts to the right during most periods. The short-run aggregate supply curve shifts to the right except during periods when workers and firms expect higher wages. Aggregate demand and potential real GDP decrease continuously.

Explain the differences between the simple Keynesian (demand-side) model and the classical (supply side) model with...

Explain the differences between the simple Keynesian (demand-side) model and the classical (supply side) model with respect to fiscal policy, what can change Y (Real GDP), and any other things that you think are relevant. To answer this question correctly, you would need to: A) Explain why fiscal policy does not change the Yd curve in the classical model but does in the simple Keynesian model. B) Explain that in the classical model Y only changes if Ys changes. C)...

1. Describe Keynesian approach and Classical model in aggregate supply long-term with graph 2. Compare the...

1. Describe Keynesian approach and Classical model in aggregate supply long-term with graph 2. Compare the development of the inflation rate in the Czech Republic to the world in 2018

3. What is the difference between the Keynesian aggregate supply curve and the Classical supply curve?...

3. What is the difference between the Keynesian aggregate supply curve and the Classical supply curve? Why do they differ in shape?

"Aggregate Demand and Aggregate Supply" is about the model that shows us how to distinguish between...

"Aggregate Demand and Aggregate Supply" is about the model that shows us how to distinguish between demand shocks and supply shocks, creating differences between what the economy could produce at full employment, or "potential output," and what is currently being produced, know as an output "gap." Is there currently a negative output gap, has the output cap closed finally, or is there now a positive output gap? After doing some research online, and reviewing the key terms of this chapter...

Discuss in detail the classical and keynesian theories of aggregate supply. Pointing out clearly differences and...

Discuss in detail the classical and keynesian theories of aggregate supply. Pointing out clearly differences and similarities between the two.

Macroeconomics question: Discuss how the aggregate supply/aggregate demand model is different from the basic supply/demand model....

Macroeconomics question: Discuss how the aggregate supply/aggregate demand model is different from the basic supply/demand model. be specific in terms of which factors cause each curve (S,D,AD,SRAS) to shift for each model

how sharp drop in house prices affect aggregate demand and aggregate supply?

What is the immediate impact on the aggregate demand and aggregate supply model when there is...

What is the immediate impact on the aggregate demand and aggregate supply model when there is an increase in available capital? *increase in the aggregate demand curve *increase in the aggregate supply curve *decrease in the aggregate demand curve *decrease in the aggregate supply curve --------------------------------------------------------------------------------------------------------------------------------------------- What is the immediate impact on the aggregate demand and aggregate supply model when there is an increase in productivity as a result of a technological change? *decrease in the aggregate demand curve *decrease...

In the dynamic aggregate demand and aggregate supply model, the rate of inflation will increase if:...

In the dynamic aggregate demand and aggregate supply model, the rate of inflation will increase if: Select one: A. AD shifts to the right by more than the LRAS curve. B. If total production increases faster than total spending. C. SRAS and LRAS curves shifts to the right by the same magnitude. D. AD shifts to the right by less than the LRAS curve.

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