According to the Keynesian View, an Unanticipated Reduction in Spending

question 24

Multiple Choice

According to the Keynesian view, an unanticipated reduction in spending will

• A) increase the demand for goods and services.
• B) raise business inventories and lead to a decline in output.
• C) lead to lower interest rates, which will stimulate aggregate demand and keep the economy at full employment.
• D) lead to a lower price level, which will quickly guide the economy to full-employment equilibrium.

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Definitions:

Formic Acid

The simplest carboxylic acid with the chemical formula HCOOH, known for its role in ant stings.

Empirical Formula

The simplest expression of a compound's composition, showing the ratio of elements without structural information.

Elemental Analysis

Elemental analysis is a process by which the composition of chemical substances is determined, identifying the quantity of each element within a compound.

Acid/Base Reaction

A chemical reaction that involves the transfer of hydrogen ions (H+) between a proton donor (acid) and a proton acceptor (base).