Keynesians

question 31

Multiple Choice

Keynesians:

• A)accept the countercyclical policy of doing nothing, that is, allowing market forces to work.
• B)believe that the level of aggregate demand in the 1930s was sufficient to generate full employment.
• C)accept the fact that policymakers should eliminate inflation first before focusing on unemployment.
• D)focus on increasing aggregate demand in order to stimulate the economy.
• E)were prepared for the events that beset our economy in the 1970s and 1980s.

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Definitions:

Cup of Coffee

A typical measure for serving coffee, involving brewing ground coffee beans with hot water, often enjoyed as a beverage worldwide.

Gallon of Gasoline

A unit of measurement equal to 3.785 liters used for measuring the volume of gasoline.

Substitution Effect

Variations in consumption habits influenced by the change in prices of goods in comparison to each other, leading to a preference shift among consumers from one good to another.

Cheaper

Describes goods or services being offered at a low price, especially in relation to comparable items.