According to Keynesian theory, the natural forces in the economy may not quickly move the economy toward potential real GDP

In the short run, a price increase in the goods and services market measured by the CPI will: a. increase the purchasing power of money

b. improve producer profits and, thereby, induce suppliers to expand output. c. increase resource prices, lower profits, and lead to a decline in output. d. reduce the natural rate of unemployment.

When economists refer to a firm's capital, they are describing the

a. markets for final goods and services. b. stock of equipment and buildings used in production. c. amount of bank financing used by the firm. d. amount of financing provided by the equity markets.