Answer to Question #204760 in Macroeconomics for Raldah Mkhari

Question

Which of the following assumptions for the simple Keynesian model of a closed economy

without a government are correct?

Answer 1

 The simple Keynesian model can be used to study inflation

Keynesian model is an economic theory which indicates an economy total spending and its effect on inflation and output. Thus, this model can be used to study inflation in the economy.