Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 9, Problem 11QP
To determine
Explain the step-by-step situation of recessionary and inflationary gaps in a self-regulatory economy.
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Chapter 9 Solutions
Economics (MindTap Course List)
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2STCh. 9.3 - Prob. 3STCh. 9 - Prob. 1QP
Ch. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 16QPCh. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - Prob. 3WNGCh. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNG
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- Economic activity is subject to fluctuations (booms and slumps). Which of the following statements is correct for the US economy, considering the entire period from 1870-2015? Select one: a. Economic fluctuations have been reduced by automatic stabilizers as the size of government has increased b. The main cause of economic fluctuations over this period has been the size of the agricultural sector and the effects of weather. c. Economic fluctuations have increased due to the speed with which money moves around the world in recent years d. Bank failures and financial crises were the main causes of economic fluctuations.arrow_forwardAccording to the Keynesian economists, who reject the self-regulating economy, how does the economy adjust to eliminate a recessionary gap? (Explain in your own words. Use a graph to explain your answer if necessary)arrow_forward1. An article in the Wall Street Journal criticized the concept that an increase in government spending can generate an increase in GDP equal to a multiple of the amount spent: "In what passes for debate in Washington, the prevailing notion seems to be 'putting money in people's pockets.' This might be called single-entry Keynesianism, since the money the government puts in pockets arrives by immaculate conception. Something like this was indeed taught in Econ 101 in the 1950s; the government 'injected' money, remember, to be 'multiplied' a number of times depending on 'the marginal propensity to consume.' Consumption good, savings bad. "By the 1960s, the monetarist school of economics had revived, and asked, where does the government get this money it 'injects.' If it's created by the Fed, you're talking about monetary policy, not fiscal policy. If it…arrow_forward
- Suppose an economy is experiencing recession. From the list below, select two (2) policy tools that the government can use to restore the economy back to a long-run macroeconomic equilibrium. Note: if you select more than two policy tools, 1 point will be taken for each additional choice. A. The government can decrease income taxes. B. The government can increase interest rates. C. The government can increase government spending. D. The government can send optimistic messages to boost expectations. E. The government can expand the resource base.arrow_forwardConsider an economy currently in recession. Which is NOT a policy move that could assist the economy, as discussed in class? Raising the money supply Raising government spending Lowering bank reserves Lowering interest ratesarrow_forwardWhat is Keynes; law?arrow_forward
- Explain why economic fluctuations happen according to Keynesians. Why do expansions happen, and recessions?arrow_forwardif the economy is in a recession, who is at fault?arrow_forwardYour Facebook feed shows a news article which says the Consumer Confidence Index has decreased. Having taken an economics class, you predict that spending in the economy will and aggregate demand will decrease; increase be unaffected; decrease decrease; decrease increase; increase increase; be unaffectedarrow_forward
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