Which of the Following Statements Concerning Keynesian Analysis Is False

question 93

Multiple Choice

Which of the following statements concerning Keynesian analysis is false?

• A)Keynes's analysis started with the recognition that the total quantity demanded of an economy's output was the sum of four types of spending: consumer expenditure,planned investment spending,government spending,and net exports.
• B)Keynes recognized that equilibrium would occur in the economy when total quantity of output supplied equals quantity of output demanded (Y^ad),that is,when Y = Y^ad.
• C)Keynes's analysis involves explaining why aggregate output is at a certain level by understanding what factors affect each component of aggregate demand and how the sum of these components could add up to an output smaller than the economy is capable of producing,resulting in less than full employment.
• D)Keynes's analysis explains how the price level will change when the total quantity of output supplied changes.

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Definitions:

Shares

Units of ownership in a company, representing a proportion of the corporation's capital, giving the shareholder a right to its profits.

Cumulative Dividends

Preferred stock dividends that accumulate if not paid as scheduled and must be paid out before dividends can be distributed to common shareholders.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock and typically doesn't have voting rights.

Income Earned

Revenue received from work performed or services provided, often used interchangeably with earned income.