In the Keynesian model, the price level is _____; in the aggregate demand and supply model, the price level is _____.
A) fixed; fixed
B) flexible; flexible
C) flexible; fixed
D) fixed; flexible

Question

Quizplus · Accepted Answer

In the Keynesian model, the price level is often assumed to be fixed in the short run, reflecting price stickiness. In the aggregate demand and supply model, the price level is flexible and can adjust based on shifts in aggregate demand and supply.

In the Keynesian Model, the Price Level Is _____; in the Aggregate