According to Pigou,the Keynesian Dilemma of a Vertical AD Curve

question 48

Multiple Choice

According to Pigou,the Keynesian dilemma of a vertical AD curve is not a dilemma at all because the demand for commodities depends directly on the level of real balances.Thus,the

• A)IS curve would shift to the left whenever the price level falls.
• B)AD curve would shift to the left whenever the price level falls.
• C)AD curve would shift to the right whenever the price level falls.
• D)AD curve would always have a negative slope.

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Definitions:

Proprietorship

A business owned and operated by a single individual, characterized by the simplicity of setting up and the sole responsibility for any of its debts or liabilities.

Financial Difficulty

A situation where an individual, business, or government faces challenges in meeting its debt obligations or managing its monetary affairs.

Bankruptcy

A legal process where individuals or organizations declare their inability to pay off their debts.

Sole Proprietorship

A firm with a single owner who has the right to all profits but who also bears unlimited liability for the firm’s losses and debts.