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Why is the SRAS curve initially horizontal in the Keynesian model?

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Final answer:

The SRAS curve is initially horizontal in the Keynesian model because it represents a recessionary economy with high unemployment. Changes in aggregate demand primarily affect output and employment, not prices.

Step-by-step explanation:

In the Keynesian model, the SRAS curve is initially horizontal in the Keynesian zone because it represents a situation of high unemployment and a recessionary gap. In this zone, the equilibrium level of real GDP is far below potential GDP, indicating a recessionary economy with high cyclical unemployment.

The horizontal SRAS curve means that changes in aggregate demand (AD) will primarily affect output and employment but have little impact on prices.

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