Keynes once remarked that, in the long run, we're all dead. He was responding to the conventional wisdom of classical economics, which argued that
a. the aggregate supply curve is vertical in the long run
b. the aggregate supply curve is horizontal in the long run
c. an economy out of equilibrium was only a short-run, temporary departure from full-employment equilibrium
d. we must save for the future
e. consumption will run out in the long run
C
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A natural monopoly exists when a firm
a. owns all of the world's known reserves of a natural resource. b. has an average cost curve that is decreasing at the point where it crosses demand. c. has obtained a patent on a new genetically modified organism. d. is able to practice price discrimination in the sale of a natural resource.
Which of the following will shift the aggregate demand curve to the left?
A. The government increases spending on education. B. Income taxes are lowered. C. Foreign economies fall into recession, reducing their demand for domestic exports. D. Consumers become optimistic about the future.
The difference between the price the consumer is willing to pay for a good or service and what he would have to pay for that unit is called: a. the total gains from trading that unit. b. the gain in producer surplus
c. the gain in consumer surplus. d. the total surplus.
An increase in the discount rate will lead to a decrease in the money supply
a. True b. False