Traditional Keynesian economists believed that:
A)the aggregate supply curve is a vertical line at a fixed level of prices.
B)an increase in aggregate demand would cause a change in the price level.
C)the government should take an active role in the economy to restore equilibrium.
D)changes in aggregate demand does not determine equilibrium real GDP.
E)the private sector is not an important source for shifts in aggregate demand.

Question

Quizplus · Accepted Answer

Traditional Keynesian economists believed that the government should take an active role in the economy to restore equilibrium, through fiscal policies such as increasing government spending or decreasing taxes to stimulate aggregate demand.

Traditional Keynesian Economists Believed That