Attempts Keep the Highest / 4 4. The Keynesian and classical views of aggregate supply Complete the following table by matching the macroeconomic assumptions about aggregate supply to the appropriate school of thought. Assumption Keynesian Classical The economy naturally tends toward potential real GDP. O O Product prices and production costs are flexible. O O The following graph shows the aggregate demand (AD) and aggregate supply (AS) curves for a hypothetical economy that is currently operating below its full-employment output level. That is, the economy is currently in a recession. The aggregate supply curve (AS) in this diagram is consistent with the view of aggregate supply. According to this viewpoint, the government should spending in response to the recessi Keynesian Shift the appropriate curve on the graph to illustrate the impact of this classical vernment spending