Thread: Economics Test
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Old 11-22-2004, 01:25 AM   #6
That Guy
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"Keynes felt that by lowering wage, you were lowering the money in circulation, which would reduce the demand. What would basically happen was that there would be less money available to invest."

it's all about investing in an ecomony, not saving, I'd go with A...

6) Consider the Keynesian consumtion function. If disposable income is greater than the break even level of disposal income, then the households will be:
a. investing
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