The approach to understanding the determination of real GDP and the price level that emphasizes incomplete adjustment in the prices of many goods is
A) the classical model.
B) the Keynesian model.
C) Say's law.
D) the aggregate demand model.

Question

Quizplus · Accepted Answer

The approach that emphasizes incomplete adjustment in the prices of many goods is the Keynesian model. Keynesian economics suggest that in the short run, wages and prices are relatively inflexible, leading to a situation where markets do not clear and there can be a persistent level of unemployment. This model focuses on the role of aggregate demand and the potential need for government intervention to stabilize the economy.

The Approach to Understanding the Determination of Real GDP and the Price