Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 11, Problem 8RQ
To determine
To Explain: The procyclical nature of various economic variables as per the Keynesian model.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Use the Keynesian Cross model to show an economy in a recession. Label all key points.
In the basic New Keynesian model. suppose that the anticipated future rate of inflation goes up due to a future increase in energy prices. Determine the effects and explain
In the Keynesian framework, which of the following events might cause a recession?
Group of answer choices
none of the above
tax rates fall
interest rates fall
foreign lenders flood the US market to make home loans
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Which of the following statements best represents the relationship between Keynesian and Neoclassical perspectives? Okeynesian and neoclassical perspectives both focus on long-run growth OKeynesian ideas work best in the short-run and neoclassical ideas work best in the long-run OKeynesian ideas work best in the long-run and neoclassical ideas work best in the short-run OKeynesian ideas focus on the natural rate of unemployment, while neoclassical ideas focus on cyclical unemploymentarrow_forwardWhat is the philosophical, economic essence of Keynesian doctrine or “Keynesianism” that emerged from the experience and attempted explanations of the Great Depression ? What would all Keynesians believe, in order to be “Keynesian?”arrow_forwardDiscuss the basic principles of the New Keynesian Economics and how it addresses perceived limitations to classic Keynesian theory.arrow_forward
- Use the Keynesian model to explain the procyclical behavior of Use the Keynesian model to explain the procyclical behavior of employment, money, inflation, and investment. Use the Keynesian model to explain the procyclical behavior ofarrow_forwardexplain the basic principles of the New Keynesian Economics and how it addresses perceived limitations to classic Keynesian theory.arrow_forwardExplain why economic fluctuations happen according to Keynesians. Why do expansions happen, and recessions?arrow_forward
- The Keynesian theory was first introduced in 1936. Why was it presented at that time, and what policy implications did it have?arrow_forwardMultiple choicearrow_forwardAssess the view that the so-called New Keynesian models seek only to justify wage and price rigidities and offer no new policy advice?arrow_forward
- In the Keynesian model, which of the following events lead to an increase in aggregate demand? (This is a multiple answer question. One of more options may be correct) a. An increase in the sales tax b. A new infrastructure project by the Federal government c. An increase in value of the Euro relative to the US-Dollar d. A drop in business confidence.arrow_forwardThe Keynesian model believes that supply creates its own demand. True Falsearrow_forwardSelect the answer that best describes Keynesian and Classical economic theories. Classical theory is useful for describing the long-run movement between economic equilibria while Keynesian theory is helpful to describe short-run movements in the price level. Classical theory suggests that the economy will quickly move between equilibria, eliminating the need for government intervention. Keynesian theory suggests that fiscal and/or monetary policy can be useful in counteracting changes in equilibria resulting from sticky prices and sticky wages. Keynesian theory suggests that tax cuts or direct government expenditure are ways to stimulate the economy while Classical theory suggests that only tax cuts provide useful stimulus. Classical and Keynesian theories both advocate for direct government intervention during recessions.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning