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The Goods Market Adjusts to an Equilibrium Right at the Point

Question 90

Multiple Choice

The goods market adjusts to an equilibrium right at the point of the Keynesian cross. Why?


A) At that point, the Keynesian theory of sticky prices is correct.
B) At only that point, total spending is equal to total production.
C) At only that point, consumers are fully satisfied and firms have maximized profits.
D) At only that point, the unemployment rate is zero and workers need not seek higher wages.

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