Keynes believed that an important source of instability in the economy was instability
a. of private investment demand.
b. in the marginal propensity to consume (b).
c. of expectations.
d. in tax collections.
e. Both a and c
E
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Suppose the government lowers unemployment by hiring more government workers. How does it matter whether wages and prices are sticky?
What will be an ideal response?
Ellie has been working for an engineering firm and earning an annual salary of $80,000 . She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of
deposit on which she was earning annual interest of $500 . Ellie's annual economic costs will equal a. $55,200. b. $75,200. c. $80,500. d. $135,700.