Keynesian Theorists Argue That Any Increase in the Money Supply

question 96

Multiple Choice

Keynesian theorists argue that any increase in the money supply

• A)is effective in increasing GDP only if it causes an outward shift of the aggregate supply curve.
• B)will increase GDP only if interest rates fall and investment is sensitive to decreasing interest rates.
• C)causes velocity to increase,and so in the short run nominal output must increase.
• D)will move the economy from the "liquidity trap" during times of recession if interest rates fall enough to stimulate private investment.

Understand the concept of natural monopoly and the rationale for government policies towards such monopolies.

Comprehend the principles and implications of price discrimination in monopolistic and imperfectly competitive markets.

Identify the conditions necessary for price discrimination to occur and its effects on producer and consumer surplus.

Analyze the relationship between market structures, price setting, and the ability of firms to engage in price discrimination.

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Definitions:

Behavior Problems

Actions or conduct that are disruptive, harmful, or otherwise deemed inappropriate by societal norms.

Autonomous Morality

The second and final stage of Piaget’s theory of moral development, in which right and wrong are defined according to internal motives and intentions rather than objective consequences.

Moral Behavior

Refers to actions that are guided by principles of right and wrong, ethics, or values.

Right and Wrong

Concepts pertaining to morality, ethics, and legality, defining what is considered acceptable and unacceptable behavior in society.