Question

In your view, is the economy currently operating in the Keynesian, intermediate or neoclassical portion of...

In your view, is the economy currently operating in the Keynesian, intermediate or neoclassical portion of the economy’s aggregate supply curve? Please explain your answer.

Homework Answers

Answer #1

At this point of time US doesn't have full employment or even the economy has not reached its full potential in the market, thereby we can claim that the economy is not at the neoclassical portion of the aggregate supply curve.  

The wages in the economy are rising and the output is also increasing with it, the economy is not in recession, and government expenditure is not the only option so the economy is not at the Keynesian portion of the economy,

AS the output is increasing, inflation persists and people are getting jobs with increasing wages in the market we can say that the economy is in intermediate portion.

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