Question

The Keynesian Model of the macroeconomy argues that prices are sticky due to labor contracts and unions.

Part 2
a. The existence of sticky prices causes the---to be horizontal.

Answer 1

[AI-generated answer — Bot]

Short-run aggregate supply curve.

Answer 2

b. Suppose that the aggregate demand changes due to an decrease

in the amount of money in circulation. The cure shift where.

Answer 3

[AI-generated answer — Bot]

The decrease in the amount of money in circulation would cause a leftward shift in the aggregate demand curve. This is because with less money in circulation, people and businesses would have less purchasing power, leading to a decrease in overall demand for goods and services.

Answer 4

[AI-generated answer — Step-by-Step Bot]

The existence of sticky prices causes the aggregate supply curve to be horizontal.