The Great Depression provided support for Keynes' view that
a. government action was necessary to ensure interest rates remained at the equilibrium level.
b. prolonged periods of unemployment would be present when demand is deficient.
c. falling resource prices would bring the economy out of a recession.
d. lower interest rates would quickly restore the full employment equilibrium of an economy.
B
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Suppose the price of a movie falls from $9 to $7. Using the midpoint method, what is the percentage change in price?
A) 33 percent B) -33 percent C) 25 percent D) -25 percent E) -97 percent
Refer to the figure above. What is the absolute value of the arc elasticity of demand when the price falls from $8 to $4?
A) 2 B) 4 C) 8 D) 10
Which of the following policies would be most likely to encourage households to save more?
a. Significant reductions in the social safety net b. Increasing social security benefits to all recipients, regardless of their contribution into the system c. Elimination of the tax deduction on individual retirement account (IRA) contributions d. Replacement of sales and excise taxes with an income tax e. Elimination of government insurance of bank deposits
Predatory pricing refers to
a. a firm selling certain products together rather than separately. b. a monopoly firm reducing its price in an attempt to maintain its monopoly. c. firms colluding to set prices. d. All of the above are examples of predatory pricing.