The Basic Keynesian Model Is Built on the Key Assumption

question 18

Multiple Choice

The basic Keynesian model is built on the key assumption that:

• A)menu costs are not significant.
• B)firms meet the demand for their products at preset prices.
• C)firms price their products so as to see a preset quantity of output.
• D)prices are prevented from changing frequently by government regulations.

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Definitions:

Net Income

The total revenue minus total expenses, representing the company's profit.

Operating Activities

These are the primary day-to-day activities of a business that relate to its production, sales, and deliveries of its products and services.

Prepaid Insurance

An asset account that represents the amount paid for insurance coverage in advance of the service period.

Depreciation Expense

Depreciation expense is the allocated reduction of the cost of a tangible fixed asset over its useful life, reflecting its wear and tear, or obsolescence.