Which of the following statements is FALSE? Keynesian economics:
A)emphasizes the effects of shifts in aggregate demand on aggregate output.
B)focuses the attention of economists on situations in which the short-run aggregate supply curve slopes upward.
C)holds "animal spirits" mainly responsible for business cycles.
D)holds that changes in business confidence have no effect on either the aggregate price level or aggregate output.

Question

Quizplus · Accepted Answer

Keynesian economics emphasizes the effects of shifts in aggregate demand on aggregate output, focuses on situations in which the short-run aggregate supply curve slopes upward, and holds “animal spirits” (psychological factors such as consumer confidence) responsible for business cycles. However, it does not hold that changes in business confidence have no effect on either the aggregate price level or aggregate output.

Which of the Following Statements Is FALSE? Keynesian Economics