CEVAP:

The assumption that prices are constant means that:

• The level of total production in the country is infinitely flexible. According to this approach, which was included in the economic theory by John Maynard Keynes during the Great Depression, there is always an idle capacity to meet the increasing demand in the economy. This means that the level of production will be determined by demand (the demand here is the effective aggregate demand), in other words by aggregate expenditures.
• There is an unemployment and idle production capacity in the economy. In such an environment, firms can increase production by employing more workers without incurring any additional cost and this does not exert any pressure on prices to increase.