Consider the following statements regarding the Classical and Keynesian approaches to output determination: A) The Classical approach assumes full employment in the long run and output is determined by aggregate supply.
B) The Keynesian approach suggests that output is determined by aggregate demand, and full employment may not be reached without government intervention.
C) The Classical model believes that prices are sticky and wages adjust to bring the economy to full employment.
D) Keynesian economics emphasizes the importance of government spending in stimulating demand during periods of economic downturn.
Which of the above statements is/are correct?
1
A and B only
2
A and D only
3
A, B, C, and D
4
B and D only