While the Classicists Believed That Both Velocity and Output Are

question 158

Multiple Choice

While the classicists believed that both velocity and output are stable, Keynesians believe:

• A) velocity is stable and output is variable.
• B) velocity and output are both variable.
• C) output is stable and velocity is variable
• D) the same as the classical economists that both output and velocity are stable
• E) at low levels of income both velocity and output are stable, but at high levels of income velocity becomes variable.

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Definitions:

Opportunity Cost

Represents the benefit that is missed or given up when an investor, individual, or business chooses one alternative over another.

Ticket Price

The cost associated with purchasing a ticket to gain entry to an event, performance, or mode of transportation.

All You Can Eat

A service model where diners pay a set fee to consume as much food as they desire from a specific selection.

Consumption

The use of goods and services by households.