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:

Semi-Annual Dividend

A payment made to shareholders that is distributed twice a year from a company's earnings.

Total Return

The overall gain or loss on an investment over a specified time period, including interest, dividends, and capital gains.

Capital Gain Yield

The rate of return on an investment based on the increase in its market value over the original purchase price, excluding dividends or interest.

Income Yield

The income return on an investment, typically expressed as a percentage of the investment’s cost or current market value.