What two solutions did Keynes suggest as appropriate government policies in order to close a recessionary gap? ( For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).

Q: How could you estimate the real GDP gap?

A: To find : How economy is in equilibrium and what is real GDP gap.

Q: What are the various factors which influence propensity to consume

A: Marginal propensity to consume is the ratio of change in consumption to the change in income  MPC =…

Q: According to Keynes, can the private sector always remove the economy from a recessionary gap? What…

A: The Keynesian economic school of thought was developed in the period of the great depression of the…

Q: Why might it be important for policy makers to know which in zone of the SRAS curve the economy is?

A: SRAS (Short run aggregate supply): It refers which shows the positive relationship between the…

Q: The chart below gives the data necessary to make a Keynesian cross diagram. Assume that the tax rate…

A: Likewise to GDP, aggregate expenditure assesses the complete expenditure of a country at a given…

Q: Referring to this table, calculate the marginal propensity to consume. Type your response Output…

A: Marginal propensity to consume is a measure of change in consumption because of change in income or…

Q: In the “complete Keynesian model”, the investment functions was I = I0 - f(i). An analyst now…

A: When investment is the function of national income, such investment is called induced investment.

Q: Is Say’s Law or Keynes’s Law a better macroeconomic perspective for our economy ? Explain.

A: Macroeconomics is the division of economics that talks about the economy as a whole. In this, the…

Q: Plot the following markets on a graph: AD/AS graph: using 19.1 trillion for RGDP and 1.9% for…

A: AD(aggregate demand of final god ) has its components as C(consumption), I(investment), G(government…

Q: What happens in the simple Keynesian model if households expect lower income in the future and…

A: The aggregate expenditure refers to the total expenditure on all the goods and services produced in…

Q: The Aggregate Expenditure Model is traditionally called the” Keynesian Cross”. Use the Aggregate…

A: The economics as a study is based upon the basic idea of scarcity, where the resources with the…

Q: Identify the direction of the change during a recession in each of the following: consumption…

A: Recession is a time period in the economy when there is a continuous fall in the output.

Q: Use the following scenario for the next two questions. Suppose that the federal government decides…

A: The AD-AS framework, or Aggregate Demand-Aggregate Supply framework, is a model used in…

Q: Will the shift of SRAS to the right tend to make the equilibrium quantity and price level higher or…

A: The total supply of goods and services that companies in a national economy expect to sell over a…

Q: Which equation represents the macroeconomic equilibrium condition in the aggregate expenditure (AE)…

A: Investment comprises of the following three components: a) Demand for new capital goods by business…

Q: Suppose most business executives expect a slowdown in the economy.  How might this situation affect…

A: The loss of business and consumer confidence leads to an economic recession.

Q: Define what economists mean when they use the word: “recession”?

A: GDP is used to measure total income in the economy.   It is the value of final goods and services…

Q: 7. Deriving and exploring the total expenditures curve The following graph shows total production…

A: Gross domestic product is the summation of a country's final goods and services. An increase in GDP…

Q: Given the following table, which shows income and consumption levels for periods 1 through 7, what…

A: The link between consumer spending and the numerous factors that influence it is referred to as the…

Q: According to Keynes(Keynesian Macroeconomics), can the private sector always remove the economy from…

A: Keynesian school of economic thought contradicts the classical economic thought that economy always…

Q: a simple Keynesian model what is the level of autonomous spending? CA = 800 GA = 600 IA = 400 MPC…

A: According to the the Keynesian model, the level of income is decided by the expenditure. The…

Q: The chart below gives the data necessary to make a Keynesian cross diagram. Assume that the tax rate…

A: National Income Ater tax Income Consumption I+G+X Minus Imports Aggregate Expenditure 100…

Q: Why did Keynes believe that the proper response to a period of recession was for the government to…

A: Keynes' macroeconomic view is referred to as the most practical view in economics as it deals with…

Q: What two solutions did Keynes suggest as appropriate government policies in order to close a…

A: A recessionary gap occurs when the potential output exceeds the actual output that is, the economy…

Q: the question is true or false: "An increase in business investment spending has the same effect on…

A: Aggregate demand is the total quantity of commodities that the consumers are willing to buy at…

Q: What policy changes would Keynes recommend to counteract a recession?

A: There are various schools of economic thought. Each school has its own beliefs and principles. The…

Q: Name two macroeconomic variables that decline when the economy goes into a recession. Name one…

A: Recession:Recession refers to the situation of a widespread decline in spending which leads to an…

Q: Suppose most business executives expect a slowdown in the economy (slower sales growth for their…

A: Economic slow down refers to the situation in which the economic growth starts to slow down and the…