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:
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Q19: Nearly half of the federal government's tax
Q20: A tax cut intended to increase aggregate
Q21: If aggregate demand increases by the amount
Q22: To eliminate an AD shortfall of $120
Q23: The total change in aggregate spending generated
Q25: The general formula for calculating the desired
Q26: If the multiplier equals 2 and the
Q27: In a diagram of aggregate demand and
Q28: Ceteris paribus,if the AD shortfall equals $600
Q29: To eliminate an AD shortfall of $100
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