The Difference Between the Keynesian and New Keynesian Approaches to the Short-Run

question 56

Multiple Choice

The difference between the Keynesian and new Keynesian approaches to the short-run aggregate supply curve is that

• A)Keynesians assumed that the short-run aggregate supply curve was vertical or nearly vertical, while new Keynesians assume that it is nearly horizontal.
• B)Keynesians focused on the difference between the actual and expected price levels, whereas new Keynesians believe this difference to be unimportant.
• C)Keynesians believed that aggregate demand was more important than aggregate supply, whereas new Keynesians believe the reverse.
• D)Keynesians assumed that the short-run aggregate supply curve was horizontal or nearly horizontal, whereas new Keynesians have provided economic explanations for price stickiness.

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Tears

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The moist linings of various body cavities, including the nose, mouth, lungs, and digestive tract, that secrete mucus.