Which of the following statements best describes Keynes’ viewpoint of individual markets?
a. He argued that individual markets for goods and services were appropriate and useful, regardless of the level of aggregate demand.
b. He argued that individual markets for goods and services were appropriate and useful, but that sometimes that level of aggregate demand was just too low.
c. He argued that individual markets for goods and services were appropriate and useful, but that sometimes that level of aggregate demand was just too high.
d. He argued that individual markets for goods and services were appropriate and useful, but only when the level of aggregate demand was low.
b. He argued that individual markets for goods and services were appropriate and useful, but that sometimes that level of aggregate demand was just too low.
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The sale of financial assets, such as stocks and bonds, is ________.
A. not included in GDP, because they do not increase domestic production B. not included in GDP, because they do not increase domestic wealth C. included in GDP, because they increase domestic wealth D. included in GDP, because they raise domestic production
If the supply of a good decreased, what would be the effect on the equilibrium price and quantity?
a. Price would increase, and quantity would decrease. b. Price would decrease, and quantity would decrease. c. Price would increase, and quantity would increase. d. Price would decrease, and quantity would increase.
If an increase in investment of $50 causes an increase in real GDP of $250, the value of the spending multiplier is:
a. 5. b. .20. c. .80. d. 3. e. 10.
For the law of diminishing returns to be present, we must have:
A. at least one factor of production to be fixed. B. output decreasing as more laborers are hired. C. the price of labor increasing as more workers are hired. D. simultaneous changes in labor and capital.