According to the Keynesian model, the short-run aggregate supply (SRAS

According to the Keynesian model, the short-run aggregate supply (SRAS) curve is horizontal when

A) prices react to an aggregate demand shock but real Gross Domestic Product (GDP) does not.
B) there are no unemployed resources and wages do not change when prices change.
C) there are unemployed resources and prices do not fall when aggregate demand falls.
D) real Gross Domestic Product (GDP) is at full capacity but prices are not flexible.

ANSWER

C