9. Explain and contrast the role of uncertainty and expectations in Keynesian and neoclassical macroeconomics. 10. Explain why three different equilibrium conditions are simultaneously necessary for overall equilibrium in the Neoclassical synthesis. 11. Describe the New Keynesian/New Consensus three- equation modern macro model. 12. What is the Zero Lower Bound (ZLB) and what problems arise when it is reached?

9. Explain and contrast the role of uncertainty and expectations in Keynesian and neoclassical macroeconomics. 10. Explain why three different equilibrium conditions are simultaneously necessary for overall equilibrium in the Neoclassical synthesis. 11. Describe the New Keynesian/New Consensus three- equation modern macro model. 12. What is the Zero Lower Bound (ZLB) and what problems arise when it is reached?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter26: The Neoclassical Perspective

Section: Chapter Questions

Problem 19CTQ: Economists from all theoretical persuasions criticized the American Recovery and Reinvestment Act....

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Neoclassical perspective is a- re sisitation of classical econolics, which states that short run dynamica of the economy dissipate very quicly due to inflexible porices. b- revisitation of classical eonomics, which statets that long run fynamics of the economy dissipate slowlllly due to inflexibilyti prices d- re visitation of classical economics which states that short run dynamics of the economy dissipate very quickly due to felexible prices
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1. a) Construct the AD-AS model showing AD, short run AS and long run AS intersecting at the potential output level and label this intersection Eo. Assume that this represents the Philippine economy before the pandemic. b) From the initial condition, illustrate in your graph how the pandemic affected the economy in the short run (was there a demand shock or supply shock or both)? c) Explain the reason for the shift in the curve or curves? d) Explain how the changes in the AD-AS model above have affected equilibrium real GDP, unemployment, and price level.
Please no written by hand solution Consider a scenario of a closed economy in the short run where price level is fixed. Assume that bothtaxes and money supply increase in a way that keep output constant in equilibrium (suppose that themarginal propensity to consume is less than one). Which of the following may result from the policychange?a) It will lead to an increase in investment but a decrease in consumption.b) It will result in an increase in investment but a decrease in government spending.c) It will lead to an increase in investment and private saving.d) It will decrease investment but increase in public saving.
09. The left-hand Which of the following statements is tru about the diagrams above depicting the macroeconommy in both Keynesian and Classical frameworks and a change from AEo to AE* and ADo to AD*? a) The left-hand diagrams show the effect of an increase in Aggregare Expenditures (and Aggregate Demand), where the short-run Aggregate Supply is horizontal, meaning a constant products price level. b) The right hand diagrams show the effect of an increase in Aggregate Expenditrues (and Aggregate DEmand), where short-run Aggregate Supply is vertical (constant Aggregate Quantity Supplied). c) The left-hand diagrams illustrate the Keynesian range of the shor-run Aggregate Supply curve, where Keynesian expansionary policy does not cause any inflation and thus is very effective. d) The right-hand diagrams illustrate the Classical or Monetarist range of the short-run Aggregate Supply curve, where Keynesian expansionary policy is totally dissipated in…
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Don't use chatgpt, I will 5 upvotes Suppose the aggregate demand curve shifts leftward from ADO. Where does the economy move initially according to the rigid Keynesian view? r:mann PO, Y4 PI, Y2 P3, YO P4, YO
Pls help with below homwork. Explain and illustrate graphically the possible fiscal and monetary policy responses to a demand shock in the Keynesian model. What are the limitations of fiscal and monetary policy in the Keynesian model when a demand shock disturbs the economy?
A9
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Consider a Keynesian business cycle theory that combines the IS-LM model with the assumption that investors become infected with optimism. Does the theory explain observed cyclical behavior of each of the following variables? Еmployrment O A. is procydlical in the data, but is countercydlical in the model. Hence the model does not match this business cycle fact. O B. is countercyclical in the data, but is procyclical in the model. Hence the model does not match this business cycle fact. OC. is countercyclical in the data, and is countercyclical in the model. Hence the model matches this business cycle fact. OD. is procyclical in the data, and is procyclical in the model. Hence the model matches this business cycle fact. Average labor productivity O A. is procyclical in the data, but is countercyclical in the model. Hence the model does not match this business cycle fact. OB. is countercyclical in the data, but is procyclical in the model. Hence the model does not match this business…
If the economy is operating in the neoclassical zone of the SRAS curve and aggregate demand falls, what is likely to happen to teal GDP?