Keynesian economists A believe that the classical dichotomy

Keynesian economists A. believe that the classical dichotomy does not hold in the long run B. believe that only the interaction between savings and investment affects the real interest rate. C. observe that prices are \" sticky\" D. all of the above E. none of the above

Solution

C. observe that prices are \" sticky\"

Under Keynesian model, AS curve is horizontal which shows that prices are sticky in the economy. Keynesian economists believes that the classical dichotomy does not hold in the short run.