The basic Keynesian model is built on the key assumption that:
A. firms meet the demand for their products at preset prices.
B. prices are prevented from changing frequently by government regulations.
C. firms price their products so as to see a preset quantity of output.
D. menu costs are not significant.
Answer: A
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Refer to Table 19-9. Suppose that the above table represents the goods and services produced in a very simple economy in 2016. Assume that steel is used as an input in the production of autos. Using that information, calculate GDP for the year 2016
What will be an ideal response?
In the long run, a monopolistically competitive firm produces at minimum average cost.
Answer the following statement true (T) or false (F)
Why is regulation necessary to achieve “universal service“?
What will be an ideal response?
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.