In the Keynesian Framework, Increments of Spending, Including Investments, Government

question 17

Multiple Choice

In the Keynesian framework, increments of spending, including investments, government spending, and exports, are known as

• A) withdrawals.
• B) injections.
• C) leakages
• D) infusions.

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Definitions:

Long-run Equilibrium

A state in which all factors of production and costs are variable, and all economic actors have fully adjusted to any economic changes, leading to a no-profit, no-loss scenario.

Monopolistically Competitive

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power and differentiated competition.

Zero Profit

A situation where a firm's total revenues exactly equal its total costs, resulting in no net gain or loss.

Short-run Equilibrium

A state in a market where supply equals demand within a short-term period, leading to a stable price level temporarily.