Real GDP is ________ determined in the classical model and ________ determined in the Keynesian model.
A) supply; supply
B) supply; demand
C) demand; supply
D) demand; demand

Question

Quizplus · Accepted Answer

In the classical model, real GDP is determined by supply factors such as labor, capital, and technology, assuming that prices are flexible and markets clear. In the Keynesian model, real GDP is determined by aggregate demand, with the assumption that prices and wages can be sticky, leading to periods of unemployment and underutilized resources.

Real GDP Is ________ Determined in the Classical Model and ________

Real GDP Is Determined in the Classical Model and