In economics, the practical application of an invention is known as

Refer to Figure 10-1. Which of the following is consistent with the graph depicted above?

A) Technological change increases the profitability of new investment. B) Households become spendthrifts and begin to save less. C) An expected recession decreases the profitability of new investment. D) The government runs a budget surplus.

Price flexibility is a key feature of ________

A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory