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.
Correct Answer:
Verified
Q27: Assume the MPC is 0.75.To eliminate an
Q28: The total change in aggregate spending generated
Q29: Which of the following formulas is used
Q30: A tax cut
A)Directly decreases the disposable income
Q31: If the MPC equals 0.80,a $200 billion
Q33: A tax cut has a smaller impact
Q34: To eliminate an AD shortfall of $100
Q35: Assume the MPC is 0.80.If the government
Q36: The desired tax cut to close a
Q37: Ceteris paribus,if the AD shortfall equals $600
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