Question

Suppose that a rise in business confidence has led to more investment in the economy and higher levels of output. In the short-run, Keynesian analysis says the rise in aggregate demand will ________ while the neoclassical model predicts ________ in the long-run. g

Answer 1

Answer: Keynesian economic theory

Explanation: Keynesian analysis says the rise in aggregate demand will ___boost growth _____ Keynesians believe consumer demand is the primary driving force in an economy. while the neoclassical model predicts ____looked at labor contracts as sources of wage stickiness to generate equilibrium models of unemployment.____ in the long run.