Keynes Thought That One Macroeconomic Problem Is That an Economy

question 70

Multiple Choice

Keynes thought that one macroeconomic problem is that an economy:

• A)can tend toward an equilibrium level of output that is below the potential level.
• B)will move back to its potential after a business cycle on its own.
• C)always operates at the potential and business cycles are created by government intervention.
• D)can be pushed below the equilibrium level of output by fiscal policy.
• E)can be pushed away from the potential if prices and wages are flexible.

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Definitions:

Supply Costs

Expenses incurred in acquiring the goods or services needed to run a business, including raw materials, parts, and utilities.

Spending Variance

The difference between the actual amount spent and the amount that was budgeted for a particular period.

Square Feet

A unit of area measurement equal to a square that is one foot on each side, commonly used in real estate and interior planning.

Indirect Materials

Materials used in the support of the production process that are not easily traced to specific products, essential for maintaining production equipment.