Which of the following would a Keynesian economist be most likely to stress?
a. Supply creates its own demand.
b. Businesses will not produce goods and services if they do not think people will buy them.
c. You cannot spend your way out of a recession.
d. When the unemployment rate is high, wage rates will fall.
e. A dollar saved is a dollar earned; a high rate of saving is the key to prosperity.
B
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An example of automatic fiscal policy is
A) an interest rate cut, initiated by an act of Congress. B) an increase in the quantity of money. C) a tax cut, initiated by an act of Congress. D) a decrease in tax revenues, triggered by the state of the economy. E) any change in the interest rate, regardless of its cause.
Refer to Table 7-6. Which country has a comparative advantage in producing swords?
A) Estonia B) Morocco C) both countries D) neither country