A Keynesian Economist Believes That

question 17

Multiple Choice

A Keynesian economist believes that

• A) if the economy was left alone, it would rarely operate at full employment.
• B) the economy is self-regulating and always at full employment.
• C) the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.
• D) the economy is self-regulating and will normally, though not always, operate at full employment if fiscal policy is not erratic.

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Definitions:

Price of Inputs

The cost of the resources used in the production of goods and services.

Price of Labor

The compensation, including wages and benefits, that employers provide to workers in exchange for their labor services.

Mozzarella Cheese

A soft, white cheese originally from Italy, commonly used on pizzas and in various dishes.

Supply of Pizza

The total quantity of pizza that producers are willing and able to sell at various prices over a certain period of time.