The Keynesian Model of the macroeconomy argues that prices are sticky due to labor contracts and unions.
Part 2
a. The existence of sticky prices causes the---to be horizontal.
3 answers
Short-run aggregate supply curve.
b. Suppose that the aggregate demand changes due to an decrease
in the amount of money in circulation. The cure shift where.
in the amount of money in circulation. The cure shift where.
The decrease in the amount of money in circulation would cause a leftward shift in the aggregate demand curve. This is because with less money in circulation, people and businesses would have less purchasing power, leading to a decrease in overall demand for goods and services.
1 answer