Quiz: Working Quiz 4 0 The Keynesian Model of the macroeconomy argues that prices are sticky due to labor contracts and unions. a. The existence of sticky prices causes the short-run aggregate supply| to be horizontal. b. Suppose that the aggregate demand changes due to an decrease in the amount of money in circulation. Using the line drawing tool, draw the new aggregate demand curve. Label it AD,. Carefully follow the instructions above, and only draw the required objects