According to Keynesian theory, the natural forces in the economy may not quickly move the economy toward potential real GDP
a. True
b. False
Indicate whether the statement is true or false
True
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Historically, the U.S. government has been used to overcome crises, redistribute income and wealth and address negatively received market outcomes
Indicate whether the statement is true or false
In the above figure, if the real wage is $10 per hour, a labor
A) shortage will occur and the real wage will rise. B) shortage will occur and the real wage will fall. C) surplus will occur and the real wage will rise. D) surplus will occur and the real wage will fall.
According to Joseph Schumpeter, economic growth is achieved through
A) a process termed "creative destruction." B) removing the entrepreneur from the production function. C) centralizing economic production. D) focusing only on making old products better rather than inventing new ones.
Which of the following explains why the AD curve is downward sloping?
a. a lower price level forces the government to reduce taxes, shifting the IS curve to the right and increasing income. b. A lower price level forces the central bank to increase the money supply, shifting the LM curve to the right and increasing income. c. A lower price level increases real money balances, shifting the LM curve to the right and increasing income. d. none of the above are correct.