The Keynesian Short-Run Aggregate Supply Curve Is Horizontal Because

question 33

Multiple Choice

The Keynesian short-run aggregate supply curve is horizontal because

• A) it represents the full employment level of real GDP.
• B) it reflects the absence of money illusion.
• C) it reflects wage and price inflexibility.
• D) it represents Say's law.

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Definitions:

Maker

The party in a financial transaction who creates or issues a promissory note and promises to pay the note's value at maturity.

Payee

The individual or entity to whom a payment is to be made.

Leap Year

A year consisting of 366 days, with an extra day added to February, occurring every four years to help synchronize the calendar year with the solar year.