The Keynesian Cross Model Attributes Differences Between Actual Output and Planned

question 12

Multiple Choice

The Keynesian cross model attributes differences between actual output and planned expenditure to

• A) unintended inventory accumulation or depletion
• B) buffer stocks resulting from risk-averse decision-making regarding production
• C) taxes
• D) net exports
• E) the diminishing marginal product of capital

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Definitions:

Efficiency Argument

The principle that resources should be allocated in a way that maximizes the productivity or welfare of a community or economy.

Jobs Argument

A perspective or argument centered on the impacts of economic policies or business decisions on employment levels.

Infant-Industry

An economic rationale for trade protectionism arguing that new industries need to be shielded from international competition to allow them to grow and become competitive.

Infant-Industry Argument

The justification for protective tariffs to shield emerging domestic industries from international competition until they become competitive.