In the simple Keynesian model of the private economy, which of the following is assumed?
A) The consumer price index can rise or fall.
B) Households and firms are savers.
C) The aggregate price level can change.
D) There is considerable slack in the economy.

Question

Quizplus · Accepted Answer

The simple Keynesian model assumes that there is considerable slack in the economy, meaning there are unemployed resources and the economy is not at full capacity.

In the Simple Keynesian Model of the Private Economy, Which