In the Keynesian model in the short run,the amount of employment is determined by the effective labor demand curve and the level of
A)prices.
B)output.
C)the real interest rate.
D)the supply of labor.

Question

Quizplus · Accepted Answer

In the short run, the level of employment is determined by the intersection of the effective labor demand curve and the aggregate supply curve, which represents the level of output. Therefore, the correct choice is B) output. The other options, such as prices, real interest rate, and supply of labor, may affect the economy in other ways, but they are not directly determining employment levels in the short run in the Keynesian model.

In the Keynesian Model in the Short Run,the Amount of Employment