Use the following graph to answer the following questions.The graph depicts an economy where aggregate demand has decreased.Note that long-run aggregate supply remains changed.

-In regard to describing how the economy functions,Keynesian economists claim that
A) more focus should be placed on the long run than the short run.
B) prices are sticky.
C) savings is crucial to growth.
D) the market tends toward stability and full employment.
E) the economy does not need help in moving back to full employment.

Question

Use the following graph to answer the following questions.The graph depicts an economy where aggregate demand has decreased.Note that long-run aggregate supply remains changed.
 
-In regard to describing how the economy functions,Keynesian economists claim that
A) more focus should be placed on the long run than the short run. 
B) prices are sticky. 
C) savings is crucial to growth. 
D) the market tends toward stability and full employment. 
E) the economy does not need help in moving back to full employment.

Quizplus · Accepted Answer

Keynesian economists believe that prices are sticky in the short run, meaning that they do not adjust quickly to changes in demand. This is evident in the graph, where a decrease in aggregate demand results in a decrease in real GDP but does not result in a decrease in the price level.

Use the Following Graph to Answer the Following Questions