The Keynesian view that demand could fall short of production is more likely to hold true if
a) wages and prices are fully flexible
b) prices, but not wages, are full flexible
c) wages and prices are not fully flexible
d) wages, but not prices, are fully flexible
Ans: c) wages and prices are not fully flexible
You might also like to view...
Ronald Coase is famous for the Coase Theorem, which is based on the premise that there is an economically efficient level of pollution reduction
Many economists believe that the tradable emissions allowance program that has been used to deal with the problem of acid rain has been successful in reducing emissions of sulfur dioxide in an economically efficient manner. Why isn't this program an example of the Coase Theorem?
Which of the following would be most likely to increase the demand for downtown parking in a large city?
a. improved bus service to the downtown area b. lower downtown parking fees c. more downtown parking lots d. more freeways leading to the downtown area e. a major employer moves to the suburbs
The term quantity demanded
a. can refer to either an individual or all buyers in a market b. only refers to all buyers in a specific market c. only refers to individual buyers in a market d. refers to how many units of a good a buyer would be willing and able to purchase at a series of prices e. determines price when it intersects with the supply curve
The theory of rational expectations concludes that
A. the public's expectations can influence the outcome of monetary policy, but not of fiscal policy. B. the public's expectations can influence the outcome of fiscal policy, but not of monetary policy. C. the public's expectations as to the effects of economic policies will tend to reinforce the effectiveness of those policies. D. by reacting in its self-interest to the expected effects of stabilization policy, the public will tend to negate the impact of those policies.