ECON MACRO
ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 11, Problem 2.9P
To determine

the assumption of classical economists with regards to the flexibility of wages, prices and interest rates, the implication of self- correcting tendenciesin an economy in case of recession and the disagreements of k’s with classical economists.

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Keynes advocated the use of fiscal and monetary policy to stabilize an economy? When are the effects of these policies most beneficial? Select all that apply. Select one or more: In the short run When the economy is operating at full employment When the economy is operating significantly above full employment When the economy is operating significantly below full employment In the long run
Keynes recommended that high unemployment should be remedied with     a reduction in the money supply     an increase in government expenditures     an increase in taxes     an increase in aggregate supply
How do Keynesians and classicals differ in their beliefs about how long it takes the economy to reach long-run equilibrium? What implications do these differences in beliefs have for Keynesian and classical views about the usefulness of antirecessionary policies? About the types of shocks that cause most recessions?
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