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The Keynesian economics challenges the classical approach by questioning the assumption of wage-price flexibility in the short-run, which makes it possible for the economy to
The Keynesian economics challenges the classical approach by questioning the assumption of wage-price flexibility in the short-run, which makes it possible for the economy to be in equilibrium at less than full employment level of factors of production. Explain how there is scope to use aggregate demand management policies in the short-term to improve economic outcomes in the Keynesian framework unlike in the Classical case. Use appropriate diagram to elaborate your answer.
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