To explain the existence of excess capacity, Keynes argued that
A. prices and wages are inflexible in the downward direction.
B. the long run average cost curve should not occur at the full employment level.
C. prices and wages are flexible, and eventually markets would go back to equilibrium.
D. the aggregate demand curve can be manipulated by advertising.
Answer: A
You might also like to view...
You would be more likely to find a motel room than a camping site if you were traveling through the West during the height of the tourist season and had no advance reservation if
A) camping sites are expensive to maintain. B) camping sites are less numerous. C) most camping sites were managed by government agencies. D) most motels do not accept advance reservations. E) motels more often accept credit cards.
Phillip owns some stocks of a pharmaceutical company. Of late, he is anticipating that the company will become bankrupt. He decides to find out more about the company's financial condition before selling the stocks
However, he tends to read only the blogs of investors who are expecting the company to become bankrupt. He soon makes up his mind and sells the stock just before its price reaches an all-time high. Phillips's behavior is an example of a(n) ________ bias. A) confirmation B) attentional C) attenuation D) distinction
If Education R Us University thought that it faced an inelastic demand for the regular academic year but an elastic demand for summer school, and it wanted to increase its total tuition revenue, it would want to____ tuition in the regular academic year and ____ tuition for summer school a. Increase; increase
b. Increase; decrease. c. Decrease; increase. d. Decrease, decrease.
OPEC failed to maintain a high price of oil in the long run, partly because both the supply of oil and the demand for oil are more elastic in the long run than in the short run
a. True b. False Indicate whether the statement is true or false