In the Simple Keynesian Model,there Are Three Simplifying Assumptions

question 100

Multiple Choice

In the simple Keynesian model,there are three simplifying assumptions.Among these assumptions is:

• A) the price level is flexible
• B) no foreign sector
• C) the price level is constant until the economy reaches its full-employment level
• D) the money supply always rises
• E) b and c

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Definitions:

Semiannual Interest Expense

The amount of interest cost incurred every six months on borrowed funds.

Straight-Line Method

A method of calculating depreciation for accounting purposes, where an asset's cost is reduced equally over its useful life.

Amortization

The gradual reduction of a debt over a specific period of time through regular payments, or the allocation of the cost of an intangible asset over its useful life.

Coupon Rate

The annual interest rate paid by a bond issuer to its bondholders, typically expressed as a percentage of the bond's face value.