The ________ model focuses on the relationship between total spending and real GDP in the short run,assuming the price level is constant.
A)supply and demand
B)national income
C)aggregate expenditure
D)business cycle

Question

Quizplus · Accepted Answer

The aggregate expenditure model, also known as the Keynesian model, analyzes the relationship between total spending (consumption, investment, government spending, and net exports) and real GDP in the short run, assuming a constant price level. This model is often used to explain why economies experience fluctuations in output and employment over time.

The ________ Model Focuses on the Relationship Between Total Spending