Keynes believed that
A) the internal structure of the economy is extremely competitive and that wage-price flexibility exists.
B) monopolistic elements in the economy prevent immediate and sharp price declines in response to falling demand.
C) even though there are monopolistic elements in the economy, wage-price flexibility exists.
D) in spite of the competitiveness of the economy, wage-price flexibility does not exist.
B
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"Rate averaging" is only possible if
a. the firm is protected from price competition and new entry. b. the firm is protected from losses resulting from unsuccessful innovation. c. the firm can choose the level of service it wishes to provide. d. "cream skimming" is permitted.
Liane maximizes her total utility when she allocates all of her available income such that the marginal utility per dollar spent on each good ________
A) is diminishing B) is maximized C) is the same D) is increasing
The concept of Say's law can be summed up by the phrase,
A) "supply creates its own demand." B) "demand creates its own supply." C) "supply and demand are equivalent concepts." D) "supply and demand are irrelevant concepts."
Contractionary fiscal policy involving federal spending cuts or tax increases can help to reduce the upward pressure on the _____________ level by shifting aggregate demand to the left.
a. trade b. production c. price d. employment