Keynes believed that:
A. market forces pushing the economy to potential income were weak.
B. the government could not aid market forces to push the economy to its potential income.
C. market forces pushing the economy to potential income were strong.
D. market forces pushing the economy into cumulative spirals were weak.
Answer: A
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Which of the following is not a reason why the prospects for the further expansion of developing country commodity exports are likely to be limited?
(a) Low income elasticities for these products. (b) Low likelihood of development of further synthetic substitutes. (c) Continued agricultural protection despite trade agreements. (d) Declining terms of trade.
Which one of the following will shift the consumption function upward?
a. Higher interest rates. b. An increase in real assets. c. Expectations of future economic growth. d. Lower capacity utilization rates. e. A tax increase.
If demand falls, what happens to equilibrium price and quantity?
What will be an ideal response?
Models that are similar to RBC models but allow for shocks other than productivity shocks are known as
A. Friedman models. B. DSGE models. C. Solow models. D. Keynesian models.