Which of the Following Statements Best Reflects Keynes' View of the Aggregate

question 70

Multiple Choice

Which of the following statements best reflects Keynes' view of the aggregate supply curve?

• A)It tends to be vertical,because the economy naturally tends toward equilibrium positions of full employment.
• B)It tends to be upward sloping (but not vertical),because as we try to produce more output out of our given resources,some labor has to work overtime at higher pay,driving up costs and prices.
• C)It tends to be horizontal during periods when substantial amounts of resources are unemployed.
• D)It tends to slope downward and to the right reflecting people's natural tendency to postpone purchases when they lose their jobs.
• E)None of the choices are true of Keynes' view of the aggregate supply curve.

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