According to the Keynesian Model, the Short-Run Aggregate Supply (SRAS)

question 360

Multiple Choice

According to the Keynesian model, the short-run aggregate supply (SRAS) curve is horizontal when

• A) real Gross Domestic Product (GDP) is at full capacity but prices are not flexible.
• B) there are no unemployed resources and wages do not change when prices change.
• C) prices react to an aggregate demand shock but real Gross Domestic Product (GDP) does not.
• D) there are unemployed resources and prices do not fall when aggregate demand falls.

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Definitions:

Strength

The quality or state of being strong, including physical, mental, or emotional robustness.

Hope

A feeling of expectation and desire for certain things to happen, often seen as a motivator in personal and professional growth.

Expectancy Theory

A motivation theory that suggests that individuals are motivated to perform if they believe their efforts will lead to favorable outcomes.

Motivational Problems

Challenges or hindrances that affect an individual’s drive to take action or achieve goals.