The Keynesian Framework Indicates That Government Can Play an Important

question 9

Multiple Choice

The Keynesian framework indicates that government can play an important role in determining aggregate output by

• A)changing the level of government spending or taxes.
• B)raising consumer confidence.
• C)raising investor confidence.
• D)changing the money supply and interest rates.

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Definitions:

ATC

Average Total Cost; the total cost of production (fixed and variable costs combined) divided by the number of units produced.

Price Charged

The amount of money a buyer has to pay to acquire a product or service from a seller.

Marginal Revenue

The revenue that a company gains by selling an additional unit of a product, indicating the income effect of increasing output by one unit.

Marginal Cost

The additional financial burden of creating another unit of a product or service.