Unlike Classical economists, Keynes believed that the economy could be trapped in a depression and not return to full employment without government intervention
Indicate whether the statement is true or false
TRUE
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The ________ the desired reserve ratio, the ________ the ________ in the quantity of money created from an initial increase of $100,000 in the monetary base
A) smaller; larger; decrease B) larger; larger; decrease C) larger; smaller; decrease D) smaller; larger; increase E) larger; larger; increase
The government played a central role in directing the post-World War II economy, causing all of the following to occur except
(a) The reduction of entitlements, such as Social Security and unemployment benefits. (b) Massive spending by the federal government, justified by the Cold War. (c) Enormously expanded government infrastructure spending on things like highways, airports, education and research and development. (d) There is no "except"; all of the above occurred.
Suppose our firm produces chartered business flights with capital (planes) and labor (pilots) in fixed proportion (i.e., one pilot for each plane). The expansion path for this business will:
A) increase at a decreasing rate because we will substitute capital for labor as the business grow. B) follow the 45-degree line from the origin. C) not be defined. D) be a vertical line.
Farmers can insure themselves against adverse price swings through the __________ market
A) bond B) stock C) futures D) food E) none of the above