According to the Keynesian model, demand shocks affect output in the short run because: nominal wages are sticky. employment can be adjusted quickly. real wages do not change as inflation
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According to the Keynesian model, demand shocks affect output in the short run because:
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nominal wages are sticky. |
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employment can be adjusted quickly. |
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real wages do not change as inflation changes. |
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None of the above. |
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- The Keynesian model believes that supply creates its own demand. True FalseOne explanation for rigid (sticky) prices according to Keynes is Group of answer choices inflation. flexible wages. government intervention. long-term labor contracts.In the Keynesian framework, which of the following events might cause inflation? Group of answer choices interest rates rise none of the above exports decrease a large increase in the price of the homes people own.
- Which characteristics are associated with the Keynesian theory? Choose all that apply. Group of answer choices Flexible prices Long-run view Long-run aggregate supply primarily affects economic growth (real GDP) Short run view Aggregate demand primarily affects economic growth (real GDP) Inflexible pricesExplain Keynesian policy for fighting unemployment and inflation.Why would a Keynesian policy response not make much sense in response to a minor recession like the one that occurred in 1990? Please make response as simple as possible.
- The Keynesian economic framework is based on an assumption that: A) an increase in government spending will cause the aggregate demand curve to shift to the left. B) people can afford a high level of government services. C) prices and wages are sticky and do not adjust rapidly. D) an increase in government spending will cause the aggregate demand curve to shift to the left.The balanced budget multiplier changes according to the values of the marginal propensity to consume and the marginal propensity to save. O False O TrueWhich 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 unemployment
- Which of the macroeconomic policies listed below is contractionary and will help reduce the rate of inflation? Group of answer choices A balanced budget increase in both government spending and autonomous taxes. Open market purchases by the central bank. Higher transfer payments to the general population to help offset higher prices. Promotion of an appreciated domestic currency in foreign exchange markets.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 loansIn 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.
