Classical and Keynesian Aggregate Supply- Macroeconomics

Mr. Clifton discusses key economic concepts, focusing on classical and Keynesian theories of aggregate supply. The classical model suggests that the economy self-corrects during recessions, while Keynesian theory argues that prices and wages are sticky, preventing automatic recovery. The video explains the different ranges of the aggregate supply curve and how changes in aggregate demand affect employment and inflation.

What are the key differences between classical and Keynesian economic theories regarding the aggregate supply curve?

Explain the concept of 'sticky prices' and how it relates to Keynesian economics.

How do the Keynesian, intermediate, and classical ranges of the aggregate supply curve differ?

What happens to the economy when aggregate demand increases beyond full employment?

Describe the impact of a decrease in aggregate demand on the economy according to Keynesian theory.