True or False:
1. On the flatter part of a short-run aggregate supply curve, a decrease in aggregate demand will decrease real output and not change the price level very much.
2. In the simple Keynesian model, the price level does not decrease as real output falls in the short run.
3. Historically, the first two primary approaches to macroeconomics were the classical school and the Keynesian school.
4. It is possible for actual real GDP to remain above potential real GDP for a long period of time.
5. Since real output can exceed potential real output only for a short period of time, unemployment can remain below the natural rate of unemployment only for a short period of time.
6. The extended high unemployment rate in the Great Depression is inconsistent with the conclusions of classical economists.
7. The degree of wage and price flexibility increases with the extent of excess capacity in the Keynesian model.