The "naïve" Keynesian model is unrealistic because it
A. Does not take into account probable changes in the price level as the economy approaches full employment.
B. Assumes that AS is upward sloping when it is more probably horizontal.
C. Assumes that the price level decreases as AD increases.
D. Does not account for changes in output due to the multiplier.
Answer: A
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David takes 10 minutes to process a customer, and 20 minutes to stock the shelves. Danny takes 15 minutes to process a customer, and 15 minutes to stock the shelves. Which of the following statements is true?
A) Danny has a comparative advantage in processing customers and in stocking shelves. B) David has a comparative advantage in processing customers but not in stocking shelves. C) Danny has an absolute advantage in performing both tasks. D) Danny has a comparative advantage in processing customers but not in stocking shelves. E) David has an absolute advantage in performing both tasks.
If a household's money income changes and prices do not change, what happens to the household's real income and budget line?
What will be an ideal response?
Which of the following characteristics is common to monopolistic competition and perfect competition?
A) Each firm faces a downward-sloping demand curve. B) Entry barriers into the industry are low. C) Firms take market prices as given. D) Firms produce identical products.
The ways to address agency costs include all EXCEPT
a. running background checks on prospective employees b. requiring employees to punch time clocks c. instituting longer work days d. replacing closed offices with cubical office spaces