According to Keynes, an unbalanced budget is appropriate in all of the following situations except when
A. The economy is at full employment.
B. Leakages and injections are out of balance.
C. The economy is below full employment.
D. Macro equilibrium is above full employment.
Answer: A
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The table below shows data for India's economy. Real GDP is measured in millions of rupees
Price level Real GDP supplied in the short run Real GDP demanded a 114 23,501 35,898 b 120 25,355 32,341 c 125 27,670 27,670 d 131 30,366 18,569 e 138 33,164 15,898 If potential GDP in India is ________ million rupees, India is experiencing ________. A) 26,500; an inflationary gap B) 28,500; an above-full-employment gap C) 26,500; a recessionary gap D) 30,000; a potential GDP gap
One implication of the phenomenon described by economist Richard Easterlin as the "hedonic treadmill" is that:
A. People who consume more goods and services are happier than those who consume less B. People can only become happier if they are consuming more and more C. There is a threshold of consumption that one must cross before one can be happy D. We can combine the happiness of different individuals to get "total happiness"