Keynesian Theory Is Based on the Hypothesis That

question 237

Multiple Choice

Keynesian theory is based on the hypothesis that

• A) saving is influenced primarily by real current disposable income.
• B) saving is influenced primarily by the interest rate.
• C) planned savings equal planned investment only at full employment.
• D) saving is always equal to savings.

Determine the effects of input price changes on the allocation of firm resources.

Understand the relationship between isocost lines and isoquants in optimizing production.

Identify the factors that cause shifts in isocost lines.

Understand how to interpret isocost lines in relation to the firm's costs of capital and labor.

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Definitions:

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