An Economist from Which of the Following Schools of Thought

question 66

Multiple Choice

An economist from which of the following schools of thought would most likely say - "An increase in government expenditure will only increase inflation, because the aggregate supply curve is vertical"?

• A) Neoclassical economics
• B) Traditional classical economics
• C) New Keynesian economics
• D) Keynesian economics
• E) Marxist economics

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Definitions:

Constrained Resource

A limited resource that restricts a company's ability to produce goods, offer services, or achieve its objectives.

Contribution Margin

The difference between the sales revenue and variable costs of a product, showing how much revenue contributes towards covering fixed costs and generating profit.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made or if an activity is ceased.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and should not affect future business decisions.