According to Keynesians,which of the following statements is correct?
A)The AD curve is horizontal but the AS is upward sloping.
B)The AD curve is vertical but the AS is upward sloping.
C)The AS is horizontal but the AD is downward sloping.
D)The AS is vertical but the AD is upward sloping.

Question

Quizplus · Accepted Answer

Keynesians believe that in the short run, especially during recessions, the aggregate supply (AS) curve is horizontal, indicating that firms will supply whatever amount of goods is demanded at the current price level. However, the aggregate demand (AD) curve is downward sloping, reflecting the inverse relationship between the price level and the quantity of output demanded.

According to Keynesians,which of the Following Statements Is Correct