The Main Difference Between Classical Economists and the Keynesians in Explaining

question 24

Multiple Choice

The main difference between classical economists and the Keynesians in explaining the SRAS curve is that

• A) classicals argue that prices are rigid, but Keynesians argue that wages are rigid.
• B) classicals argue that wages are rigid, but Keynesians argue that prices are rigid.
• C) classicals argue that output changes with price changes as long as there is misperception about relative price levels, but Keynesians argue that SRAS is positively sloped for the term of the labour contracts.
• D) classicals argue that SRAS is positively sloped because of rational expectations, but Keynesians argue that it is because of the failure of rational expectations.

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