Which of the Following Is a Basic Difference Between the Classical

question 313

Multiple Choice

Which of the following is a basic difference between the classical model and the Keynesian model in which the Keynesian short-run aggregate supply curve exists?

• A) The classical model assumes that the long run aggregate supply curve is vertical, while the Keynesian model assumes the long run aggregate supply curve is horizontal.
• B) The classical model assumes that the position of the long run aggregate supply curve is determined by full employment, while the Keynesian model assumes that the long run aggregate supply curve will be to the left of full employment.
• C) The classical model assumes that the level of real GDP is supply determined, while the Keynesian model assumes that it is demand determined.
• D) The classical model uses real GDP, while the Keynesian model uses nominal GDP.

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Definitions:

Internal Validity

The extent to which a study can demonstrate that a causal relationship exists between variables, free from external influences.

Construct Validity

The extent to which a test measures what it claims to be measuring, in the context of psychological testing and research.

Mundane Realism

Refers to whether the setting of an experiment physically resembles the real world.

Reactance

An unpleasant emotional response that people often experience when someone is trying to restrict their freedom.