QUESTION 6 P (products price level) Short-run Aggregate Supply Keynesian range Classical or Modetarist range intermediate range AS Q (real GDP) 06. Which of the following statements are FALSE? O (a) In the horizontal (Keynesian) range of the AS curve Keynesian macroeconomic policy is very effective. (b) In the intermediate range Keynesian macroeconomic policy is less effective because its impact is partially dissipated by inflation. (c) In the vertical (Monetarist or Classical) range Keynesian policy is totally ineffective as an increase in Aggregate Demand produces only inflation. (d) The AS curve can become vertical only when the economy is operating beyond full employment.

QUESTION 6 P (products price level) Short-run Aggregate Supply Keynesian range Classical or Modetarist range intermediate range AS Q (real GDP) 06. Which of the following statements are FALSE? O (a) In the horizontal (Keynesian) range of the AS curve Keynesian macroeconomic policy is very effective. (b) In the intermediate range Keynesian macroeconomic policy is less effective because its impact is partially dissipated by inflation. (c) In the vertical (Monetarist or Classical) range Keynesian policy is totally ineffective as an increase in Aggregate Demand produces only inflation. (d) The AS curve can become vertical only when the economy is operating beyond full employment.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter26: The Neoclassical Perspective

Section: Chapter Questions

Problem 2SCQ: Legislation proposes that the government should use macroeconomic policy to achieve an unemployment...

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