How did Keynes propose to solve the problem of high unemployment?
A) Increase the growth rate of the money supply.
B) Allow wages to decline, so that firms will want to hire more workers.
C) Put on wage and price controls, so wages won't rise and firms won't have to lay people off to cut costs.
D) Have the government increase its demand for goods and services.
D
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Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment. Which of the following will happen in the short run?
A) The aggregate demand curve will shift to the right. B) Unemployment will rise. C) Prices will rise. D) Output will rise.
The natural rate of unemployment is always more than the actual rate of unemployment because it excludes frictional and seasonal unemployment rates
a. True b. False Indicate whether the statement is true or false