What could Keynes have meant by his now famous statement, "in the long run we are all dead?"
A) Government intervention is destabilizing, will lead to slower growth in the long run, and will prevent an economy from self-regulating.
B) Government intervention in the economy is necessary in times of recession because an economy rarely restores itself to full employment.
C) Government intervention in the economy is useless because it takes too long to take effect.
D) Government intervention in the economy is only effective if it is not erratic.
B
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Which of the following describes a reason U.S. consumers might especially value trade with China?
a. China is a large market with potential to buy many U.S. exports. b. China supplies many goods imported to the United States. c. China and the United States have similar cultural practices. d. China was closed off from U.S. trade for several decades.
In the long run, if some monopolistically competitive firms are earning economic losses then
A) firms will leave the industry. B) raise prices until they earn economic profits. C) they will increase production until marginal costs fall. D) new firms will enter the industry.
Corporate governance involves the way in which
A) the government nationalizes corporations. B) the government licenses corporations. C) a corporation is subject to government regulations. D) a corporation is structured.