(A) requires fine tuning to reach full employment.
(B) should not be left to market forces.
(C) will never be at full employment.
(D) is self correcting.
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The economists who emphasised wage-flexibility as a solution for unemployment were?
(A) Monetarists.
(B) New-Keynesians.
(C) Classical economists.
(D) Keynesians.
Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are?
(A) market prices.
(B) sticky prices.
(C) fixed prices.
(D) regulatory prices.
Government policies that focus on increasing production rather than demand are called?
(A) fiscal policies.
(B) monetary policies.
(C) incomes policies.
(D) supply-side policies.
Aggregate demand refers to the total demand for all domestically produced goods and services in an economy generated from?
(A) the household and government sectors.
(B) the household sector.
(C) all sectors except the rest of the world.
(D) all sectors including the rest of the world.
To get the economy out of a slump, Keynes believed that the government should?
(A) increase both taxes and government spending.
(B) increase taxes and/or decrease government spending.
(C) cut both taxes and government spending.
(D) decrease taxes and/or increase government spending.
According to the Classical model, unemployment?
(A) could not persist because wages would fall to eliminate the excess
supply of labour.
(B) could persist for long periods of time because wages are not flexible.
(C) could be eliminated only through government intervention.
(D) could never exist.
According to Keynes, the level of employment is determined by?
(A) interest rates.
(B) the level of prices.
(C) the level of aggregate supply in the economy
(D) the level of aggregate demand for goods and services.