Which of the Following Is True in the Keynesian Model

question 49

Multiple Choice

Which of the following is true in the Keynesian model?

• A)An easy fiscal policy affects output despite the effect of fiscal policy on the interest rates.
• B)An easy monetary policy is associated with an increase in interest rates.
• C)An easy fiscal policy is associated with a decrease in interest rates.
• D)An easy monetary policy will lead to crowding-out effect.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers where no single party can dictate the market price of goods or services.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, often a measure of producer wellbeing.

Production Costs

The total expenses incurred in the process of creating goods or services, comprising direct materials, direct labor, and overheads.