Keynes argued that ______ prevents the market solution from working rapidly enough to avert a(n) ______.
a. wage inflexibility; increase in the price level
b. disinflation; prolonged inflationary gap
c. low demand; unexpected positive shock
d. wage inflexibility; prolonged recession
d. wage inflexibility; prolonged recession
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A price taking firm employs each of its inputs into production until its marginal product is equal to 1.
Answer the following statement true (T) or false (F)
A price support on milk is not in the interest of milk drinkers, so why do elected public officials successfully implement milk price supports?
A) Milk price supports are in the public interest. B) A small number of households (dairy farmers) gain a great deal, while the costs of the support program is spread among millions of other (milk drinking) households. C) Dairy farmers are selfish. D) Milk drinkers are generally unselfish.
The figure above shows a typical perfectly competitive corn farm, whose marginal cost curve is MC and average total cost curve is ATC. The market is initially in a long-run equilibrium, where the price is $3.00 per bushel
Then, the market demand for corn decreases and, in the short run, the price falls to $2.50 per bushel. In the new short-run equilibrium, the farm produces ________ bushels of corn and sells corn at ________ per bushel. A) 250,000; $3.00 B) 250,000; $2.50 C) 300,000; $2.50 D) 200,000; $2.50
What determines potential GDP?
What will be an ideal response?