How Did Keynes Propose to Solve the Problem of High

question 9

Multiple Choice

How did Keynes propose to solve the problem of high unemployment?

• A)Increase the growth rate of the money supply.
• B)Allow wages to decline, so that firms will want to hire more workers.
• C)Put on wage and price controls, so wages won't rise and firms won't have to lay people off to cut costs.
• D)Have the government increase its demand for goods and services.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.