Keynesians:
a. accept the countercyclical policy of doing nothing, that is, allowing market forces to work.
b. believe that the level of aggregate demand in the 1930s was sufficient to generate full employment.
c. accept the fact that policymakers should eliminate inflation first before focusing on unemployment.
d. focus on increasing aggregate demand in order to stimulate the economy.
e. were prepared for the events that beset our economy in the 1970s and 1980s.
d
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Budget surplus:
What will be an ideal response?
The distinction between international trade and international money is not entirely clear because
A) real developments in the trade accounts do not have monetary implications. B) the balance of payments includes only real measures. C) developments caused by purely monetary changes have no real effects. D) trade models focus on real, or barter relationships. E) most international trade involves monetary transactions.