To Explain the Existence of Excess Capacity, Keynes Argued That

question 279

Multiple Choice

To explain the existence of excess capacity, Keynes argued that

• A) prices and wages are flexible, and eventually markets would go back to equilibrium.
• B) the long run average cost curve should not occur at the full employment level.
• C) the aggregate demand curve can be manipulated by advertising.
• D) prices and wages are inflexible in the downward direction.

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