According to the Keynesian model, the short-run aggregate supply (SRAS) curve is horizontal when
A) prices react to an aggregate demand shock but real Gross Domestic Product (GDP) does not.
B) there are no unemployed resources and wages do not change when prices change.
C) there are unemployed resources and prices do not fall when aggregate demand falls.
D) real Gross Domestic Product (GDP) is at full capacity but prices are not flexible.
Question 2
Sustained growth refers to a growth process:
A) where growth in GDP per capita is attributed primarily to public sector firms and enterprises.
B) where GDP per capita grows at a positive and steady rate for long periods of time.
C) where growth in GDP per capita is translated into equal increase in welfare for all citizens in the country.
D) where GDP per capita grows at a rate of more than 20 per year for long periods of time.
