How Did Keynes Propose to Solve the Problem of High

question 49

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:

Total Revenue

The total amount of money generated by a business from the sale of goods or services before any expenses are deducted.

Short-Run Supply

The quantity of goods a firm is willing and able to supply to the market at different price levels in a short-term period, typically assuming some inputs are fixed.

Average Fixed Cost

The fixed costs of production (those that do not change with the level of output) divided by the quantity of output produced. It decreases as production increases.

Total Product

The total quantity of output produced by a firm over a given period as a result of inputs.