One of the major weaknesses of the original Keynesian approach to the business cycle was
A) the assumption that firms were perfectly competitive.
B) the failure to explain why wages were rigid.
C) the denial of the existence of the Pigou effect.
D) the assumption that the demand for labor depended on the real wage.
B
You might also like to view...
If the marginal cost for Big Ed's Used Car Emporium to advertise one additional day each week on a local TV station is $1,500, then Big Ed's should advertize that additional day
A) as long as the weekly marginal cost does not rise. B) only if the marginal benefit the company receives each week is greater than $1,500 plus an acceptable profit margin. C) as long as the marginal benefit the company receives each week is just equal to or greater than $1,500. D) until the marginal benefit the company receives reaches zero.
"Input-output" macroeconomics stresses that a change in nominal aggregate demand ________ produces an equal-proportional change in every firm's marginal cost, so that firms should consider indexing their price to nominal aggregate demand a very
________ pricing strategy. A) need not, safe B) need not, risky C) must, safe D) must, risky
If the exchange rate rises, the quantity of dollars supplied
A) decreases, and there is movement down along the supply curve. B) increases, and there is movement up along the supply curve of dollars. C) increases with movement down along the supply curve. D) does not change. E) increases, and there is movement down along the supply curve.
In the above figure, a technologically inefficient point is
A) a. B) e. C) g. D) f.