"According to Keynes, the economy is essentially a self-regulating system." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. The inflexibility of prices meant that changes in aggregate demand would affect output and employment rather than the price level. Involuntary unemployment was likely when aggregate demand decreased because the wage level would not adjust to bring about a new, full-employment equilibrium. Hence, the economy is not a self-regulating system according to Keynes.
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Equilibrium expenditure is the level of aggregate expenditure at which
A) aggregate planned expenditure equals real GDP. B) aggregate private expenditure equals real GDP. C) planned inventory investment equals zero. D) aggregate production equals real GDP. E) aggregate actual expenditure equals real GDP.
Stock markets transactions involve
A. exclusively in newly issued stocks. B. purchases and sales of previously issued stocks. C. in both newly issued and previously issued stocks, but they do not deal in bonds. D. in large amounts of both newly issued and previously issued stocks and bonds.
Traditionally blacks have earned about _____% of what whites have earned.
A. 20 B. 40 C. 60 D. 80
Calculate the MPS.
