Which of the following observations concerning the Keynesian model is not true?
A)It is helpful in explaining the events that unfolded in the 1930s.
B)It is less useful in explaining today's economy.
C)It explains the stagflation of the 1970s.
D)It does not incorporate possible shifts in the aggregate supply curve.

Question

Which of the following observations concerning the Keynesian model is not true?
A)​It is helpful in explaining the events that unfolded in the 1930s.
B)​It is less useful in explaining today's economy.
C)​It explains the stagflation of the 1970s.
D)​It does not incorporate possible shifts in the aggregate supply curve.

Quizplus · Accepted Answer

The Keynesian model primarily focuses on demand-side economics and does not adequately explain stagflation, which involves both rising unemployment and inflation, a scenario that requires an analysis of both supply and demand shocks. The 1970s stagflation was more accurately addressed by models that include supply-side factors, unlike the traditional Keynesian framework.

Which of the Following Observations Concerning the Keynesian Model Is