According to Keynes, once a system attains an economy-wide equilibrium
A) planned investment will be zero.
B) there may or may not be excess productive capacity.
C) the economy will be at full productive capacity.
D) planned consumption will be zero.
B
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When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:
A) is constant. B) is measured in dollar terms. C) is measured by the amount of the other good that must be given up. D) usually decreases.
If the nominal rental price of capital divided by the price of output is less than the marginal product of capital, a firm that wishes to maximize profits will
A) purchase more capital goods. B) purchase fewer capital goods. C) maintain the current level of capital goods. D) allow capital goods to wear out without purchasing additional capital goods.