Who believed that small disturbances in output, prices, or unemployment were likely to be magnified by the invisible hand of the marketplace?
A. Adam Smith.
B. John Maynard Keynes.
C. Jean-Baptiste Say.
D. President Herbert Hoover.
Answer: B
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The business cycle is the
a. relationship between unemployment and inflation. b. irregular fluctuations in economic activity. c. positive relationship between the quantity of money in an economy and inflation. d. predictable changes in economic activity due to changes in government spending and taxes.
Anything that keeps new firms from entering an industry in which firms are earning economic profits.
One complication in the process of reducing inflation by creating recessions is that the price level
A. adjusts more quickly to recessionary gaps than to inflationary gaps. B. does not apply as it does in inflationary gaps. C. always rises. D. rarely falls.
At small levels of output the gap between the ATC and the AVC curves is _______, and at larger levels of output the gap between the ATC and the AVC curves is _______.
Fill in the blank(s) with the appropriate word(s).