In the Keynesian model, a firm's high menu costs cause
A. efficiency wages.
B. real-wage rigidity.
C. full employment.
D. price stickiness.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
A monopoly is defined as a firm that has the largest market share in an industry
Indicate whether the statement is true or false
Keynesian economists believe that fiscal and monetary policies are necessary to offset
A. changes in the price of gold. B. the difference between imports and exchange rates. C. the inherent instability of the private sector. D. the growth of monopoly business and labor unions.
Under what circumstances would a monopolist price be as low as the price that would prevail in a perfectly competitive market?
What will be an ideal response?