Keynes believed
A. recessions were temporary.
B. budget deficits were to be avoided at all costs.
C. any kind of spending was necessary to get us out of a depression.
D. both wages and prices were downwardly flexible.
C. any kind of spending was necessary to get us out of a depression.
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Given that all countries have the same Cobb-Douglas production function, i.e. Y/N = (K/N)b, a ten-fold difference in per capita income requires a difference in capital per capita by a factor of
A) 10. B) 10b. C) 101/b. D) b.
Refer to Scenario 12.3. What will be the price of this new drink in the long run if the firms in the industry collude with one another to maximize joint profit?
A) $3 B) $9 C) $12 D) $16.50 E) none of the above
The marginal propensity to consume explains how much of the next dollar of disposable income
A. a business will invest. B. the government will spend. C. a household will spend. D. foreign residents will use to purchase domestic exports.
For Matthew, the marginal utility of the 9th soda in a day is positive and the marginal utility of the 10th soda in a day is zero. This
A. implies that Matthew maximizes utility by consuming 9 sodas per day. B. is impossible because each additional unit of consumption of any good must provide positive marginal utility. C. implies that Matthew's demand curve for sodas per day will become upward sloping at 10 sodas per day. D. implies that at a zero price Matthew's demand curve will intersect the quantity axis at 10.