Keynesian economists would likely argue that the classical model is which of the following?
A) a long-run theory
B) a short-run theory
C) both a long-run and short-run theory
D) a sticky price theory

Question

Quizplus · Accepted Answer

Keynesian economists view the classical model as a long-run theory because it assumes that markets clear quickly and naturally, leading to full employment in the long run. However, Keynesians argue that in the short run, prices and wages may be sticky, causing temporary deviations from full employment. Therefore, the classical model is not seen as an appropriate short-run theory by Keynesians.

Keynesian Economists Would Likely Argue That the Classical Model Is