The short-run aggregate supply curve is upward sloping
A)in both the Classical and Keynesian models,but for different reasons.
B)in the Classical model,but not in the Keynesian model.
C)in the Keynesian model,but not in the Classical model.
D)in neither the Classical nor the Keynesian model.

Question

Quizplus · Accepted Answer

In the Classical model, the short-run aggregate supply curve is upward sloping due to the assumption of flexible prices and wages, which adjust to changes in demand. In the Keynesian model, it is upward sloping because of sticky wages and prices, which do not adjust immediately, leading to changes in output when demand changes.

The Short-Run Aggregate Supply Curve Is Upward Sloping