In the simple Keynesian model,there are three simplifying assumptions.Among these assumptions is:
A) the price level is flexible
B) no foreign sector
C) the price level is constant until the economy reaches its full-employment level
D) the money supply always rises
E) b and c

Question

Quizplus · Accepted Answer

In the simple Keynesian model, two of the simplifying assumptions are that there is no foreign sector (meaning it ignores international trade) and that the price level is constant until the economy reaches its full-employment level. This model focuses on the short-run fluctuations in the economy, assuming that prices do not adjust immediately.

In the Simple Keynesian Model,there Are Three Simplifying Assumptions