The simple Keynesian model assumes that
A) gross private domestic investment exceeds net investment by the capital consumption allowance.
B) prices, especially the price of wages, are "sticky downward."
C) there will never be any excess capacity in the short run.
D) aggregate demand will always equal aggregate supply.
B
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When the invisible hand is at work,
A. the price system will sometimes give incorrect cost signals to consumers. B. the price system will allocate resources based only on consumer need. C. all prices will be set equal to marginal costs. D. there will be some shortages and surpluses that cannot be avoided.
If the Gini coefficient for Cartland is 1, it means that income distribution is perfectly equal in this society
Indicate whether the statement is true or false
Under a balanced budget policy, a sharp rise in GDP will cause
a. no serious budget changes. b. a tax cut or an increase in expenditures. c. a tax increase or expenditure cut. d. tax receipts to exceed government expenditures.
When prices fall and the cash balances that you hold in your wallet are worth more allowing you to purchase more with your money, then this explains why the aggregate demand curve is downward sloping. The effect that describes this phenomena is the:
A. Real balances effect B. Foreign trade effect C. Interest rate effect D. Nominal income effect