In the Very Short Term, in the Keynesian Model, Which

question 221

Multiple Choice

In the very short term, in the Keynesian model, which of the following is fixed and does not change when GDP changes?

• A) planned consumption
• B) planned investment
• C) planned imports
• D) All of the above answers are correct

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Definitions:

ATC

Average Total Cost, which is the total cost divided by the quantity of output produced, representing the per unit cost of production.

Diminishing Returns

A rule which posits that when investment in a specific sector grows, the profit rate from that investment will not continue to rise past a certain threshold if all other factors are kept unchanged.

AVC

Average Variable Cost is the total variable cost per unit of output.

ATC

Average Total Cost; the per-unit cost of production, calculated by dividing the total cost by the quantity of output produced.