Which of the following statements is false?
A) Keynesians would not advocate an expansionary monetary policy to eliminate a recessionary gap if they believed that investment demand was interest-insensitive.
B) Keynesians would not advocate an expansionary monetary policy to eliminate a recessionary gap if they believed the money market was in the liquidity trap.
C) Keynesians would advocate an expansionary monetary policy to eliminate a recessionary gap if they believed investment spending was insensitive to changes in the interest rate.
D) Keynesians believe that money wages are inflexible in the downward direction.
C
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A consumer's willingness to pay directly measures
a. the extent to which advertising and other external forces have influenced the consumer's preferences. b. the cost of a good to the buyer. c. how much a buyer values a good. d. consumer surplus.
In the rational expectations theory, a temporary change in real output could result from:
A. Anticipated price-level changes B. A price-level surprise C. A coordination failure D. Insider-outsider relationships