Which of the Following Is an Important Insight of Keynesian

question 102

Multiple Choice

Which of the following is an important insight of Keynesian analysis?

• A) When an economy is in a recession, lower interest rates and lower wage rates will quickly direct the economy back to full employment.
• B) When widespread unemployment is present, increases in aggregate demand will exert a larger impact on real output than when the economy is operating at or near full employment.
• C) When an economy is in a recession, it makes sense to increase taxes and reduce government expenditures.
• D) A balanced budget is the key to maintenance of full employment.

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Definitions:

Gallbladder

Organ attached to the liver that serves to store and concentrate bile.

Bile

Secretion of the liver that is temporarily stored and concentrated in the gallbladder before being released into the small intestine, where it emulsifies fat.

Stomach

In vertebrates, muscular sac that mixes food with gastric juices to form chyme, which enters the small intestine.

Partially Digest

Partially digest describes a process where food is incompletely broken down by enzymes, typically occurring in the digestive system before nutrients are absorbed.