Keynesian analysis indicates that an unexpected decline in aggregate demand will lead to
a. a reduction in inventories and an expansion in employment.
b. an increase in inventories and a reduction in output.
c. lower interest rates, which will stimulate aggregate demand and keep the economy at full employment.
d. a lower price level, which will quickly guide the economy to full-employment equilibrium.
B
You might also like to view...
In 2013, which component of U.S. GDP had a negative value?
A) government spending B) investment C) net exports D) Components of GDP cannot have a negative value.
When used with a natural monopoly, an average cost pricing rule results in
A) the efficient level of output. B) economic losses for the firm. C) the need for government to subsidize the natural monopoly. D) zero economic profit for the firm. E) the firm making an economic profit.
Under socialism, factories, farms, mines, and natural resources are owned by:
A. laborers. B. government. C. private stockholders. D. no one.
A firm with a flat demand curve
A) has no brand loyalty. B) has weak brand loyalty. C) has strong brand loyalty. D) isn't really worried about brand loyalty; flat demand curves guarantee zero profit.