According to classical economists, the aggregate supply curve is _____, but according to Keynes, it is _____.
A) vertical in the short run; upward sloping in the short run
B) upward sloping in the short run; vertical in the short run
C) upward sloping in the short run; horizontal in the short run
D) downward sloping in the long run; always vertical

Question

Quizplus · Accepted Answer

Classical economists believe the aggregate supply curve is vertical in the short run, indicating that the total output is determined by the factors of production and is not influenced by the price level. In contrast, Keynes argued that the aggregate supply curve could be upward sloping in the short run, reflecting that prices and wages do not adjust immediately, allowing for changes in aggregate demand to affect the total output.

According to Classical Economists, the Aggregate Supply Curve Is _____