In the Keynesian model, the price level is _____; in the aggregate demand and supply model, the price level is _____.
A) fixed; fixed
B) fixed; flexible
C) flexible; fixed
D) flexible; flexible

Question

Quizplus · Accepted Answer

In the Keynesian model, the price level is assumed to be fixed, especially in the short run, reflecting rigidities in the economy. In contrast, the aggregate demand and supply model allows for price flexibility, adjusting to changes in demand and supply conditions.

In the Keynesian Model, the Price Level Is _____; in the Aggregate