The simple Keynesian model assumes that
A) gross private domestic investment exceeds net investment by the capital consumption allowance.
B) prices, especially the price of wages, are sticky downward.
C) there will never be any excess capacity in the short run.
D) aggregate demand will always equal aggregate supply.
Question 2
Using the above figure, if the government levies a new unit tax in this market, S represents the original supply curve, and St represents the after-tax supply curve, then the after-tax price paid by consumers is the vertical distance from the origin
to A) point A.
B) point B.
C) somewhere between point B and point A.
D) point F.
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