Keynes Rejected the View That Lower Wages Would Direct a Recessionary

question 38

Multiple Choice

Keynes rejected the view that lower wages would direct a recessionary economy back to full employment because

• A) lower wages would cause the central bank to reduce the money supply and thereby prolong the recession.
• B) lower wages would stimulate inflation and thereby prolong the recession.
• C) market forces would quickly direct an economy back to full employment.
• D) powerful trade unions and large corporations made wages highly inflexible.

Identify the effects of increasing confidence levels on the width of confidence intervals.

Recognize the importance of using confidence intervals for estimating population parameters from sample data.

Analyze the adequacy of sample sizes for achieving desired margins of error and confidence levels.

Evaluate the validity of claims based on confidence intervals and margin of error analyses.

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Definitions:

Monthly Interest Rate

The fraction of the annual interest rate divided by twelve, representing the interest for a single month.

Credit Policy

A credit policy is a set of guidelines that a company follows to determine the credit terms and conditions for its customers, including payment terms, credit limits, and how to manage delinquent accounts.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

Credit Policies

Guidelines that set out the criteria for extending credit to customers, including terms of payment and interest rates.