The Key Argument of John Maynard Keynes Is That

question 48

Multiple Choice

The key argument of John Maynard Keynes is that

• A)government can pull an economy out of a recession by stimulating demand and creating a cycle of increased production and jobs.
• B)government regulations during economic depressions must be lifted because they destroy the already-slim profit margin.
• C)the economy of size shows that monopolies are the most efficient way to distribute goods throughout a national marketplace.
• D)government can rectify a falling economy by regulating the money supply.

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Definitions:

Total Revenue

The overall amount of money generated by a firm from selling its goods or services, calculated as the unit price multiplied by the quantity sold.

Perfectly Inelastic Demand

The case in which the quantity demanded does not respond at all to changes in the price; the demand curve is a vertical line.

Demand Curves

A graph representing the relationship between the price of a good and the quantity of that good buyers are willing to purchase at various prices.

Price Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good, defined as the percentage change in quantity demanded divided by the percentage change in price.