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RideAnS [48]
3 years ago
13

Keynes argued that a. monopolistic elements in the economy will prevent an immediate sharp fall in prices as a result of decreas

ing demand. b. supply creates its own demand. c. prices are flexible in a downward direction. d. wages are flexible in a downward direction.
Business
1 answer:
Scorpion4ik [409]3 years ago
6 0

Answer:

a. monopolistic elements in the economy will prevent an immediate sharp fall in prices as a result of decreasing demand

Explanation:

When there is recession the price of the factor goes down and with that, the insufficient demand for a certain good or services is eliminated. The reasoning is that the decrease in prices stimulates demand and adjust the market.

Keynes among other economist consider that unemployment increase during recessions because the nominal wages rate do not fall. As the union and worker do not want to see their wage decrease. Same is applied to prices which makes then inflexible in a downward direction.

While "supply creates its own demand" is "Says's Law" which is rejected in keynes main book "The general theory"

Hece option A is the only one which is true

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In general, businesses and consumers spend less when interest rates are high. This is because borrowing money costs more when interest rates are high. As a result, companies frequently turn to the stock market to raise money, which can cause stock values to decline.

An increase in interest rates causes the local currency to appreciate. In comparison to domestic goods and services, import prices decline. Exports see a decline in profitability and competition. Exports decline while imports rise, reducing the net export portion of total demand and spending.

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1 year ago
Which of these is an advantage of filing for Chapter 7 bankruptcy?
kotegsom [21]

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2 years ago
Northern Organic Farms is considering a project which will produce annual sales of $975,000 and increase cash expenses by $848,0
stealth61 [152]

Answer:

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3 years ago
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