How Does the Original, Simplified Keynesian Model Compare with Modern

question 207

Multiple Choice

How does the original, simplified Keynesian model compare with modern Keynesian analysis?

• A) The original Keynesian model assumed price flexibility whereas the modern analysis does not.
• B) In both cases, the short-run aggregate supply curve (SRAS) is horizontal.
• C) Modern analysis shows an upward sloping SRAS to reflect some price flexibility. The original Keynesian model's SRAS is horizontal and assumes sticky prices.
• D) All of the above.

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Definitions:

Oxygen-Poor

Environments or situations where the concentration of oxygen is significantly lower than the atmospheric levels, often creating challenges for aerobic organisms.

Inferior Vena Cava

Vein that delivers oxygen-poor blood from the lower body to the heart.

Three-Chambered Heart

A type of heart structure found in some amphibians and reptiles, consisting of two atria and one ventricle, allowing for a degree of separation between oxygenated and deoxygenated blood.

Amphibian

Tetrapod with scaleless skin; it typically develops in water, then lives on land as a carnivore with lungs. For example, a frog or salamander.