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| Keynesian economics? 'In applying ISLM analysis to show the Keynesian route to lift an economy out of recession, the assumption that general price level remains unchanged might seen reasonable. In relaxing this assumption a boost in AD may affect both quantity and price. Show the relevance of AS to resolving the issue of whether a boost to AD is likely to reduce unemployment or lead to price inflation.' Hi the problem I am having is understanding the first section of the question. The only reason I can think of for a fixed price level is if the LM curve is horizontal, is there anything I'm missing? Thankyou. |
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| Thread | Thread Starter | Forum | Replies | Last Post |
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