John Maynard Keynes argued that
A) downward nominal-wage rigidity prevented the classical self-correction mechanism from working to end recessions.
B) the automatic forces of the market would restore the economy to full employment very quickly.
C) the classical macroeconomists' argument that government spending should be used in recessions would not eliminate a recession.
D) fluctuations in aggregate supply were the primary causes of recessions.
Correct Answer:
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Q120: Macroeconomic equilibrium occurs when
A)the quantity of output
Q121: When the price level falls
A)aggregate demand shifts
Q122: According to Keynesian economists,the key limitation on
Q123: The aggregate supply curve is upward sloping
Q124: In the classical theory of employment,a decline
Q126: In the Keynesian analysis of macroeconomic equilibrium,the
Q127: When real GDP is in equilibrium there
Q128: An equilibrium level of real GDP is
Q129: A curve showing the amount of real
Q130: When the economy is in the Keynesian
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