According to the Keynesian view, the prolonged unemployment of the Great Depression
a. was surprising because Keynesians believed that wage rates would decline and direct the economy to full employment.
b. was surprising because Keynesians believed that lower interest rates would direct the economy to full employment.
c. resulted because the total expenditures on goods and services were less than the full-employment rate of output.
d. resulted because the federal government ran large budget deficits during the 1930s.
C
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If the Fed increases the interest rate in the U.S.:
A) the demand curve for dollars will shift to the left. B) the demand curve for dollars will shift to the right. C) the supply curve of dollars will shift to the right. D) the real exchange rate of the U.S. will depreciate.
What is a budget deficit? What is a budget surplus? Since 1970, has the U.S. government run more budget deficits or budget surpluses?
What will be an ideal response?