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:

Aggregate Planning

A marketing activity that ensures supply meets demand by adjusting production rates, workforce levels, and inventory stock.

Overtime

Additional time worked by employees beyond their standard hours, often compensated at a higher pay rate.

Subcontracting

The practice of assigning or outsourcing part of the obligations and tasks under a contract to another party known as a subcontractor.

Stockouts

Instances when items are not available for sale due to insufficient stock.