The Keynesian Aggregate Supply Model Does Not Take into Account

question 34

Multiple Choice

The Keynesian aggregate supply model does not take into account what aspect of human behavior that is factored into later assumptions?

• A)People adapt to what happens after it happens.
• B)People sometimes make irrational choices.
• C)People anticipate the future and plan for it.
• D)People are largely unpredictable in their preference for saving versus spending.

---

Definitions:

The Classicals

Economists from the 18th and 19th centuries who laid the foundations of classical economics, focusing on free markets and self-regulating economies.

Say's Law

An economic theory that proposes that supply creates its own demand, suggesting that production is the source of demand and that markets naturally balance over time.

Classical Economics

A school of thought in economics that emphasizes the role of free markets in facilitating economic development and regulating economic systems.

Keynesian Economics

An economic theory stating that government intervention through fiscal and monetary policy can mitigate the adverse effects of economic recessions and depressions.