The Keynesian AD curve differs from the classical AD curve in that:
A)the classical AD curve can shift in response to non-monetary shocks.
B)the Keynesian AD curve can shift in response to monetary shocks.
C)the Keynesian AD curve can shift in response to non-monetary shocks.
D)there is no difference,both are determined by the quantity theory.
E)none of the above.

Question

Quizplus · Accepted Answer

The Keynesian AD curve can shift in response to non-monetary shocks, such as changes in consumer or business confidence, while the classical AD curve is primarily driven by changes in the money supply. Additionally, the Keynesian AD curve is more elastic in the short run due to sticky wages and prices, while the classical AD curve is more vertical.

The Keynesian AD Curve Differs from the Classical AD Curve