Which of the following statements are correct? i. In the Keynesian model there will always be an automatic tendency towards full employment if the economy is operating at a level of production orincome below full-employment. ii. Macroeconomic theory deals with events that occurred in the past. iii. Consumption spending can exceed income.A. i, ii and iiiO B. iiC. i and iiD. iii

The keynesian economists argue that government intervention in economic activities is necessary to…

Which of the following statements are correct? i. In the Keynesian model there will always be an automatic tendency towards full employment if the economy is operating at a level of production or ncome below full-employment. ii. Macroeconomic theory deals with events that occurred in the past. iii. Consumption spending can exceed income. O A. i,ii and iii O B. ii O C. i and ii ⒸD. iii

Which of the following statements are correct? i. In the Keynesian model there will always be an automatic tendency towards full employment if the economy is operating at a level of production or ncome below full-employment. ii. Macroeconomic theory deals with events that occurred in the past. iii. Consumption spending can exceed income. O A. i,ii and iii O B. ii O C. i and ii ⒸD. iii

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 16P

See similar textbooks

Similar questions

Which of the following features of a Keynesian consumption function is not true? a. In the short run, current disposable income has the most impact on consumption. b. As income rises, so does the average tendency to consume. c. the average tendency to consume decreases as income increases decrease d .The marginal consumption propensity is smaller than one.
Please answer fast please help
. 6. Macroeconomic equilibrium and the ranges of the aggregate supply curve The following graph shows the aggregate demand (AD1AD1) and aggregate supply (AS) curves for a hypothetical economy with Natural Real GDP of $11 trillion. The Simple Keynesian ModelAD2New Eq8.08.59.09.510.010.511.011.512.01301251201151101051009590PRICE LEVELREAL GDP (Trillions of dollars)ASAD1 Suppose consumers and businesses become more optimistic about future economic conditions, causing aggregate demand to increase by a total $0.5 trillion at each price level (after all multiplier effects have taken place). On the previous graph, use the green line (triangle symbol) to show the new aggregate demand curve (AD2AD2). Be sure that AD2AD2 is parallel to AD1AD1 (you can mouse over AD1AD1 to see its slope). Then use the black drop lines (cross symbol) to indicate the new macroeconomic equilibrium after the shift of aggregate demand. The increase in aggregate demand leads to a movement along…
Please answer fast please arjent help please
For each the following economies, calculate equilibrium Y*, the multiplier, and the size of the recessionary or inflationary gap, if any. a. AE= 250 +.75 Y Yf= 1200 b. AE= 400+ .9 Y Yf= 3000 c. AE= 300 +. 8Y Yf=1500 d. AE= 300+ .67 Y Yf=1000
the question in the attached image
b. Consider the following Keynesian Model: C= 50 + 0.4Yd T= 40 I=0.2Y X= 16 G= 30 M= 20 a. Using the equilibrium condition, solve for the value of the equilibrium output. b. What is the value of consumption? c. Write the savings function and use it to calculate the value of savings. d. What is the value of the multiplier? e. Is there a trade deficit or surplus? Give reasons for your answer.
1. depict Keynes’s three conjectures about the consumption function. 2. explain Keynesian’s consumption function that was created from these conjectures. 3. How does the Life-Cycle Hypothesis resolve the puzzle?
n the Keynesian cross model, assume that the consumption function is given by C = 110 + 0.75(Y - T). Planned investment is 300; government purchases is 350. Assume a balanced budget. a. Graph planned expenditure as a function of income.b. What is the equilibrium level of income?c. If government purchases increase to 400, what is the new equilibrium income? What is the multiplier for government purchases? Solve D and Ed. What level of government purchases is needed to achieve an income of 2,200? (Taxes remain unchanged.)e. What level of taxes is needed to achieve an income of 2,200? (Government purchases remain at 350.)
In the Keynesian model, an increase in government spending increases ___. A.aggregate demand by an equal amount. B.aggregate demand by a multiple amount. C.the money supply by a multiple amount. D.the money supply by an equal amount.
A drop in the price level will have what effect in the aggregate demand model and the income-expenditure model?A.decreases aggregate demand and planned expenditures.B.increases aggregate demand, but decreases planned expenditures.C.decreases aggregate quantity demanded, but increases planned expenditures.D.increases aggregate quantity demanded and planned expenditures.
Explanation