The simple Keynesian model assumes that
A. gross private domestic investment exceeds net investment by the capital consumption allowance.
B. aggregate demand will always equal aggregate supply.
C. there will never be any excess capacity in the short run.
D. prices, especially the price of wages, are "sticky downward."
Answer: D
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Which of the following explains why two firms, Apex and Bongo, would engage in implicit collusion, rather than explicit collusion?
A) Implicit collusion always has an enforcement mechanism that forces both firms to collude; explicit collusion does not have an enforcement mechanism. B) Implicit collusion is less costly to both firms than explicit collusion; therefore, profits will be greater for both firms if they engage in implicit collusion. C) Implicit collusion allows Apex to increase its profits at the expense of Bongo without Bongo knowing that collusion has occurred; if Apex engages in explicit collusion, Bongo will realize collusion has taken place and retaliate against Apex. D) explicit collusion is illegal; if the managers of Apex and Bongo engage in implicit collusion they may be within the law.
Based on Table 9.3, if values in the table are amended to reflect a net increase in U.S. foreign direct investment of 100, then the new balance for the capital account balance becomes
A) -75. B) -25. C) +25. D) +75.