Within the Keynesian Model, If the Output of an Economy

question 26

Multiple Choice

Within the Keynesian model, if the output of an economy is less than the full-employment level, then

• A) a reduction in government expenditures will direct the economy back to full-employment equilibrium.
• B) a reduction in wage rates and resource prices will quickly restore full-employment equilibrium.
• C) a reduction in the real interest rate will soon restore full-employment equilibrium.
• D) output will tend to remain below full-employment capacity unless aggregate expenditures increase.

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Definitions:

Controlled

Pertains to experimental conditions that are manipulated or regulated by the researcher to isolate cause and effect relationships.

Human Eye

A complex organ capable of receiving visual images, which are then processed by the brain, it comprises structures such as the cornea, iris, lens, and retina.

Camera

A device for capturing visual images in the form of photographs, video recordings, or digitally.

Retina

The retina is the light-sensitive layer of tissue at the back of the eye, which detects light and converts it into neural signals for processing by the brain.