Analysis of the short run and long run indicates that the _____ assumptions are most appropriate in _____.
A)classical; both the short run and the long run
B)Keynesian; both the short run and the long run
C)classical; the short run, whereas the Keynesian assumptions are most appropriate in the long run
D)Keynesian; the short run, whereas the classical assumptions are most appropriate in the long run

Question

Quizplus · Accepted Answer

Keynesian assumptions are typically applied to the short run where prices and wages are sticky, while classical assumptions are more applicable in the long run where prices and wages are flexible.

Analysis of the Short Run and Long Run Indicates That