Question

In the Keynesian framework, most short-run fluctuations in GDP are due to?

1) changes in aggregate demand
2) changes in the natural rate of unemployment
3) changes in potential GDP
4) changes in the unemployment insurance system

Answer 1

In the Keynesian framework, most short-run fluctuations in GDP are due to changes in aggregate demand.

Step-by-step explanation:

In the Keynesian framework, most short-run fluctuations in GDP are due to changes in aggregate demand. Keynesian economics emphasizes the role of aggregate demand in driving business cycles and fluctuations in GDP. When aggregate demand increases, there is higher demand for goods and services, which leads to increased production and GDP. Conversely, when aggregate demand decreases, there is lower demand, which results in decreased production and GDP.