Which statement is TRUE?
A) Keynes treated short-run macroeconomics as a minor issue.
B) Keynes emphasized the short-run effects of shifts in aggregate demand on aggregate output, employment, and prices, whereas the classical economists focused on the long-run determination of the aggregate price level.
C) The classical economists believed that the short-run aggregate supply curve was upward sloping.
D) The classical economists emphasized the short-run effects of shifts in aggregate demand on aggregate output, whereas Keynes focused on the long-run determination of the aggregate price level.

Question

Quizplus · Accepted Answer

Keynes emphasized the short-run effects of shifts in aggregate demand on aggregate output, employment, and prices, whereas the classical economists focused on the long-run determination of the aggregate price level. This statement accurately describes the differences in approach between the two schools of thought. Choice A is incorrect as Keynes was a major proponent of short-run macroeconomics. Choice C is also incorrect as the classical economists believed in a vertical short-run aggregate supply curve. Choice D is incorrect as it is the opposite of the truth.

Which Statement Is TRUE