Within the framework of the Keynesian model, which of the following will occur if spending is abnormally low?
What will be an ideal response?
Equilibrium output will be less than the full-employment rate of output.
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Having free entry and exit in a market can help drive:
A. innovation. B. cost-cutting. C. quality improvements. D. All of these occur more often with free entry and exit.
The sum of the coins and currencies in the bank's vault and its deposit in the Fed is called:
a. vault cash. b. transaction deposits. c. legal reserves. d. required reserves. e. loanable funds.
In ________ markets, the elasticity of supply tends to be positive.
A. output B. all C. input D. labor
During the 1960s, many Keynesian economists felt that by studying the Phillips curve
A) policy makers could fine-tune the economy by selecting policies that would produce the exact mix of unemployment and inflation that suited current government objectives. B) policy makers could eliminate even frictional unemployment in the economy. C) the President and Congress did not need to attempt to balance the budget. D) policy makers could dispense with the Federal Reserve's open-market operations.