Keynes Once Remarked That, in the Long Run, We're All

question 151

Multiple Choice

Keynes once remarked that, in the long run, we're all dead. He was responding to the conventional wisdom of classical economics who argued that:

• A)the supply curve should remain vertical in the long run.
• B)World War I was fought to free Britain from economic ruin.
• C)depression was only a short-run, temporary departure from full-employment equilibrium.
• D)funeral plots need to be determined by the market.
• E)market-based realities cause the estate tax to be too high.

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Definitions:

Peso Price

The value of a good or service expressed in pesos, the currency of various Latin American countries.

Exchange Rate Appreciation

Exchange rate appreciation refers to the increase in value of one currency relative to another, meaning you need fewer units of the appreciating currency to buy one unit of another currency.

Domestic Deflation

A decline in the general price level of goods and services within a domestic economy over a period of time.

Exports and Imports

Describes goods and services sold to other countries (exports) and goods and services purchased from other countries (imports).