Potential income is that level of income that:
A) the economy always produces.
B) toward which the economy gravitates in the short-run.
C) an economy is capable of producing without generating higher inflation.
D) an economy is capable of producing without generating unemployment.
Correct Answer:
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Q6: According to Keynes, why might deflation create
Q7: In the AS/AD model, as the price
Q8: Some economists believe that the good times
Q9: If productivity and wages both rise by
Q10: The short-run aggregate supply curve is upward
Q12: Equilibrium income is that level of income:
A)which
Q13: Keynes believed the economy was:
A)fluctuating around potential
Q14: Keynes believed equilibrium income was:
A)not fixed at
Q15: Starting from a long-run equilibrium, an increase
Q16: According to the Keynesian model,
A)wages are flexible
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