Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 25, Problem 10RQ
From a Keynesian point of view, which is more likely to cause a recession: aggregate
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From a Keynesian point of view, which is more likely to cause a recession: aggregate demand or aggregate supply, and why?
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What 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?”
Chapter 25 Solutions
Principles of Economics 2e
Ch. 25 - In the Keynesian framework, which of the following...Ch. 25 - In a Keynesian framework, using an AD/AS diagram,...Ch. 25 - Use the AD/AS model to explain bow an inflationary...Ch. 25 - Suppose the U.S. Congress cuts federal government...Ch. 25 - How would a decrease in energy prices affect the...Ch. 25 - Does Keynesian economics require government to set...Ch. 25 - List three practical problems with the Keynesian...Ch. 25 - Name some economic events not related to...Ch. 25 - Name some government policies that cod cause...Ch. 25 - From a Keynesian point of view, which is more...
Ch. 25 - Why do sticky wages and prices increase the impact...Ch. 25 - Explain what economists mean by menu costs.Ch. 25 - What tradeoff does a Phillips curve show?Ch. 25 - Would you expect to see long-run data trace out a...Ch. 25 - What is the Keynesian prescription for recession?...Ch. 25 - How did the Keynesian perspective address the...Ch. 25 - In its recent report, The Conference Boards Global...Ch. 25 - What may happen if growth in China continues or...Ch. 25 - Does it make sense that wages would be sticky...Ch. 25 - Suppose the economy is operating at potential GDP...Ch. 25 - Do you think the Phillips curve is a useful tool...Ch. 25 - Return to the table from the Economic Report of...Ch. 25 - Explain what types of policies the federal...
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Similar questions
- What is supply-side or "trickle-down" economics? Why do Keynesians reject supply-side economics? Does the history of the marginal income tax structure in the U.S. support or challenge the idea of tickle down economics?arrow_forwardNow think about a major recession, like the one that occurred in 1982. (Hint: a major recession could be caused by a large shift to the left in the AD curve.) Why would a Keynesian policy make more sense in response to a major recession like the one that occurred in 1982? What would be the cost of following a neoclassical policy then?arrow_forwardCompare and contrast the classical and Keynesian views of aggregate demand and aggregate supply.arrow_forward
- In your view, is the economy currently operating in the Keynesian, intermediate or neoclassical portion of the economy's aggregate supply curve?arrow_forwardWho is John Maynard Keynes? What time period did he write? What did he believe about the market’s ability to recover from a recession?arrow_forwardWhat might be some Keynesian prescriptions to get the economy out of an economic slump (both fiscal and monetary)?arrow_forward
- What would a Keynesian likely recommend in response to a recession? What would a neoclassical likely recommend? Why would a Keynesian policy response not make much sense in response to a minor recession like the one that occurred in 1990? What would be the cost of letting the economy adjust by itself to a new long run equilibrium?arrow_forwardWhat is the Keynesian prescription for recession? For inflation?arrow_forwardNow that you have learned about the Keynesian perspective, what do you think about it? In your post, be sure to describe the Keynesian viewpoint and how they would use both fiscal and monetary policy to achieve their goals. Do you think Keynes was right? Why or why not?arrow_forward
- A stimulative monetary or fiscal action should increase aggregate demand. What factors may limit the actual increase in aggregate demand?arrow_forwardWhat is the best approach to managing the economy, supply-side or demand-side economics? There are two schools of thought on how to managing the economy. The first is demand-side economics which also the Keynesian approach. This approach maintains that the demand for products and services drives the economy as such economic policies should focus on the aggregate demand curve. The other approach is called supply-side economics or more popularly referred to as Reaganomics. In this trickle-down approach, it is postulated that the production of goods and services is what drives the economy with the focus on the aggregate supply curve. Both fiscal and monetary policies have the potential to stimulate change in either the aggregated demand or the aggregate supply curves. In your initial post defend which approach should be used to (ensure to include in your subject line, which approach you are defending): Restore the economy that is in a recession. Identify the challenges that may be…arrow_forwardHow would the level of aggregate demand be affected by a rise in the interest rate in the Keynesian theory? Which components would be affected most strongly?arrow_forward
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