Most Economists Think That the Keynesian Position Is That

question 51

Multiple Choice

Most economists think that the Keynesian position is that

• A) the wage rate will never fall and the price level will never adjust downward if the economy is in a recessionary gap.
• B) the time required before wages and prices adjust downward is short enough for the economy to be called self-regulating.
• C) the time required before wages and prices adjust downward is long enough for the economy to exist in a recessionary gap for a long time.
• D) the time required before wages and prices adjust downward if the economy is in a recessionary gap is rather long,but short enough for the economy to be considered self-regulating.

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Definitions:

Static Thinking

Static thinking is a cognitive approach where an individual perceives situations or concepts as unchanging and fails to recognize the potential for growth or alteration.

Symbolic Thinking

The process of using symbols, such as words or images, to represent objects, actions, or ideas not immediately present.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It controls the basic emotions (fear, pleasure, anger) and drives (hunger, sex, dominance, care of offspring).

Reactivity

The state or capacity of being reactive or the degree to which a thing is reactive.