Multiple Choice
Within the Keynesian aggregate expenditure-output model, if an economy operates below full employment:
A) a reduction in wage rates and resource prices will soon restore full-employment equilibrium.
B) a reduction in the real interest rate will soon restore full-employment equilibrium.
C) an increase in the real interest rate will soon restore full-employment equilibrium.
D) the economy may remain below full employment unless aggregate expenditures increase.
Correct Answer:
Verified
Correct Answer:
Verified
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