The Keynesian Model of Aggregate Expenditure Assumes That

question 172

Multiple Choice

The Keynesian model of aggregate expenditure assumes that

• A) both individual firmsʹ prices and the price level are fixed.
• B) both individual firmsʹ prices and the price level are flexible.
• C) individual firmsʹ prices are flexible but the price level is fixed.
• D) individual firmsʹ prices are fixed but the price level is flexible.

---

Definitions:

Individual

A single human being distinct from a group, society, or community.

Ideologies

A framework of thoughts and principles, specifically one that establishes the foundation for policies and theories in politics or economics.

Ruling Class

The social class that decides upon and sets the major policies, owning the majority of wealth, and holds the primary power in a society.

Capitalist Ideologies

A set of beliefs that value the free market and the role of private enterprise in driving economic and social progress.