According to the Keynesian model, an increase in autonomous investment leads to
A. a more than proportional increase in real Gross Domestic Product (GDP).
B. a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP).
C. a less than proportional increase in real Gross Domestic Product (GDP).
D. a proportional increase in real Gross Domestic Product (GDP).
Answer: A
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Because of increasing marginal cost, most supply curves
A) are horizontal. B) are vertical. C) have a negative slope. D) have a positive slope.
Prior to 1840, most businesses were
A) family-owned. B) corporate in structure. C) vertically integrated. D) collections of partnerships.
Suppose that the dollar real exchange rate falls by 10% against the euro, 20% against the pound, and 25% against the yen. If the United States trades equally with each country, what is the percentage decline in the real effective exchange rate?
a. 22.5% b. 18.3% c. 15.1% d. 20.3%
Why do negative externalities like pollution result in inefficiency?
A. Because producers artificially restrict their supply. B. Because producers ignore the external costs they impose on third-parties. C. Because producers manufacture more goods than people can afford to buy. D. Because producers will receive an unequal distribution of profits.