An Important Distinction Between the Classical and Keynes's View of the Economy

question 69

Multiple Choice

An important distinction between the classical and Keynes's view of the economy is that

• A)Keynes stressed the supply side of an economy while classical economists stressed the demand side of the economy.
• B)classical economists argued that output gaps were caused by shifts in the long-run aggregate supply while Keynes' maintained that output gaps were created by shifts in aggregate demand.
• C)Keynes stressed the demand side of an economy while classical economists stressed the supply side of the economy.
• D)classical economists argued that output gaps were caused by shifts in the long-run aggregate supply while Keynes' maintained that output gaps were created by wage and price rigidities.

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Definitions:

Foreign Currencies

Currencies used in international trade and investment, different from the domestic currency of a particular country.

Current Account Balance

A measure of a country's international financial position, reflecting the difference between its savings and its investment by tracking exports and imports of goods, services, and financial transfers.

Money Outflows

The movement of money out of a business, project, or investment, typically representing expenses or investments.

Money Inflows

Financial resources entering a specific area, system, or entity, such as the funds received by a business or economy from external sources.