?Within the simple Keynesian Cross model, equilibrium takes place:
A. ? at full employment.
B. ?when aggregate spending equals real disposable income.
C. ?when the money interest rate and real interest rate are equal.
D. ?when actual and expected rates of inflation are equal.
Answer: B
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If it took 20 years for real GDP to double, what was the growth rate of real GDP?
A) 4.5 percent B) 3.0 percent C) 3.5 percent D) 4 percent E) 5 percent
Market power refers to:
A.) the use of market prices and sales to signal desired outputs. B.) the ability and willingness to sell specific quantities of a good. C.) the ability of a firm to alter the market price of a good or service. D.) None of the above.
The use of fiscal policy to stabilize the economy is limited because
A) changes in government spending and tax rates have a small effect on aggregate demand.
B) changes in government spending and tax rates have a small effect on interest rates.
C) the legislative process can be slow, which means that it is difficult to make fiscal policy actions in a timely way.
D) the Internal Revenue Service (IRS) resists changes in tax rates because of all the changes they would have to make to the tax code.
The MRP curve for labor:
A. is downsloping and shows the relationship between wage rates and the quantity of labor demanded. B. is perfectly elastic if the firm is selling its output competitively. C. is upsloping and lies above the labor supply curve. D. will shift location when the wage rate changes.