The "Naïve" Keynesian Model Is Unrealistic Because It

question 82

Multiple Choice

The "naïve" Keynesian model is unrealistic because it

• A)Does not take into account probable changes in the price level as the economy approaches full employment.
• B)Assumes that the price level decreases as AD increases.
• C)Assumes that AS is upward sloping when it is more probably horizontal.
• D)Does not account for changes in output due to the multiplier.

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Definitions:

Flood Plains

Flat areas next to rivers and streams that are prone to flooding, naturally fertile due to the deposition of river sediments.

Urban Sprawl

The spread of city buildings and houses into areas that were previously countryside, known for causing environmental and social issues.

Expansion Room

Space specifically designed or allocated to allow for growth or increase in capacity.

Vegetation

Vegetation encompasses the plant life present in a particular region or ecosystem, playing crucial roles in the ecological balance and providing habitats for animals.