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Which of the Following Statements About the Keynesian View of the Macroeconomy

Question 126

Multiple Choice

Which of the following statements about the Keynesian view of the macroeconomy is incorrect?


A) Expectations are based on "animal spirits."
B) To achieve and maintain full employment, active help from fiscal policy and monetary policy is required.
C) Expectations are the most significant influence on aggregate demand.
D) Technological change is the most significant influence on both aggregate demand and aggregate supply.
E) The money wage rate is extremely sticky in the downward direction so there is no automatic mechanism for eliminating a recessionary gap.

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