Suppose that the owner of a local ice cream store, knowing that demand for ice cream is higher when the weather is warmer, always charges a price in cents for a scoop of ice cream that is equal to two times the current outdoor temperature, measured in Fahrenheit (so that if it is 90 degrees outside, the ice cream is $1.80 per scoop) . This type of behavior is ________.
A) exactly the type of behavior that Keynes believed most firms exhibit
B) known as meeting demand
C) inconsistent with the key assumption upon which the basic Keynesian model is built
D) free from menu costs
Correct Answer:
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Q10: If firms sell less than is expected,
Q11: All of the following would be included
Q12: When actual investment is greater than planned
Q13: Unplanned inventory investment equals zero when:
A)planned investment
Q14: In the basic Keynesian model all of
Q16: Dave's Mirror Company expects to sell $1,000,000
Q17: All of the following would be included
Q18: The four components of planned aggregate expenditure
Q19: The decision about whether to change prices
Q20: If firms sell more output than expected,
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