Answer to Question #211704 in Economics for Paballo

Question

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

without a government are correct?

a) The economy consists of households and small firms only.

b) There is no foreign sector. 

c) Prices and wages fluctuate.

d) The stock of money supply and interest rates fluctuate.

[1] a and d

[2] b and c

[3] a and b

[4] c and 

Answer 1

[2] b and c