The original Keynesian economic theory states that
A) the short-run aggregate supply (SRAS) curve is always vertical.
B) many prices would not decline even when aggregate demand decreases.
C) wages tend to fall more quickly than the overall price level.
D) the economy naturally self-regulates so as to reach full employment quickly.
B
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If aggregate expenditure in an economy equals 3,000 + 0.75Y and full employment real GDP equals 12,000, then this economy has
A. no autonomous expenditure. B. a recessionary gap. C. an inflationary gap. D. no output gap.
In a market-based economy, only the government can reduce economic uncertainty
Indicate whether the statement is true or false
Suppose the quantity of money and real GDP do not change. If velocity increases, then the
A) price level will fall. B) price level will rise. C) inflation rate will fall. D) real interest rate will fall. E) real interest rate will rise.
The unemployment rate measures the percentage of the working-age population who can't find a job
Indicate whether the statement is true or false