Economics 12E - Arnold - TB_202

Economics 12E - Arnold - TB_202 - c wages and prices are...

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c. wages and prices are often inflexible in the downward direction. d. the equilibrium level of output will always be at the full-employment level of output. ANSWER: c POINTS: 1 DIFFICULTY: Moderate NATIONAL STANDARDS: United States - BUSPROG: Analytic LOCAL STANDARDS: United States - OH - Default City - DISC: Understanding and applying - DISC: Understanding and applying economic models KEYWORDS: Bloom's: Knowledge 42. Which of the following statements is false ? a. Keynes believed that monopolistic elements in the economy will prevent immediate price declines. b. Keynes believed that during periods of high unemployment, labor unions will prevent wages from falling fast enough to restore full employment. c. Keynes believed that interest rate flexibility will ensure that saving is equal to investment. d. Keynes did not believe in Say's law. ANSWER: c POINTS: 1 DIFFICULTY: Challenging NATIONAL STANDARDS: United States - BUSPROG: Analytic LOCAL STANDARDS: United States - OH - Default City - DISC: Understanding and applying - DISC: Understanding and applying economic models KEYWORDS: Bloom's: Application 43. Keynes believed that POINTS: 1 DIFFICULTY: Challenging
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