A key assumption of the Keynesian model of macroeconomics is a fixed _____.
A) interest rate
B) price level
C) exchange rate
D) growth rate
E) unemployment level

Question

Quizplus · Accepted Answer

A key assumption of the Keynesian model of macroeconomics is a fixed price level. In this model, changes in aggregate demand result in changes in output and employment, rather than changes in the price level. Therefore, the price level is assumed to remain constant in the short run, allowing for adjustments in output and employment.

A Key Assumption of the Keynesian Model of Macroeconomics Is