If the economy is suffering through a rampant inflationary period, would a Keynesian economist advocate for stabilization policy that involves higher taxes and higher interest rates? Explain your answer.

Q: In country X, the unemployment rate is 13%, the inflation rate is 16% and the GDP growth rate is 3%.…

A: Handling unemployment, inflation and GDP growth rate is not possible with a single policy. It has to…

Q: Some people have argued that the high inflation of the late 1970s was a consequence of the fact that…

A: The Federal Reserve:It has the responsibility to manage the activities of commercial and financial…

Q: Suppose that, in an attempt to combat severe unemployment, the government decides to increase the…

A: The AS-AD model in macroeconomics is used to comprehend and explain how changes in aggregate demand…

Q: could policy makers achieve a permanently lower level of unemployment if they were prepared to…

A: The Philips curve depicts the relationship between the inflation and unemployment rates.  The…

Q: Why might “belt-tightening” by consumers in a recession be unwelcome?

A: Recession is a phase of business cycle when there is a fall in the economic activity, associated…

Q: concept of fiscal and monetary policy with own perceptive point of view

A: Economic policy is the set of measures and strategies implemented by governments or other governing…

Q: What might be some Keynesian prescriptions to get the economy out of an economic slump (both fiscal…

A: Under the Keynesian theory, the aggregate demand is given by the sum of consumption demand (C),…

Q: Which of the following statements would most likely be made by someone following New Classical…

A: The follower of new classical economics does not believe in the active government intervention in…

Q: In April​ 2020, as a result of the coronavirus​ -- along with the​ Governments’ “shuttering​ in”…

A: The answer is (b) Maintain the current targeted federal funds rate. Since the inflation is below the…

Q: During the recession of 2008, Did the US Government take a page of the Keynesian Macro theory to…

A: Keynesian macro theory primarily identifies the role of government or government intervention in…

Q: Why do economists often disagree about the conduct of macroeconomic stabilization policy?

A: Economic growth can take place only if the economy is stabilised. Macroeconomic stabilisation is a…

Q: You are the chair of the Federal Reserve when, because of sudden loss of consumer confidence, there…

A: A period of economic decline which is temporary and results in the decline in Gross Domestic Product…

Q: Many central banks now indicate that their primary objective is to keep inflation at a persistently…

A: The fluctuations in nations GDP overtime is shown by the business cycle models. It helps in showing…

Q: is monetary policies in dealing with the consequences of recession is better than the use of fiscal…

A: Monetary policy is the government policy which leads to changes in money supply which helps in…

Q: On June 5, 2003, the European Central Bank acted to decrease the short-term interest rate in Europe…

A: A purchase made with the intention of creating income or capital growth is known as an investment.…

Q: How an economist thinks that the economy works—is it self-regulating or not?—influences his opinion…

A: SELF REGULATING ECONOMY. Classical economists believe in self-regulating economy. Wage rate and…

Q: Myanmar experienced a 60 percent currency dropped within four weeks as the economy tanks since early…

A: Fiscal policies are the measures used by the government to affect the economy. The major fiscal…

Q: an economy's policy makers be tempted to renege  or reverse an announcement they made earlie

A: Policymaker- the person who design policies.

Q: If you had to make a choice today between a policy that would head off increases in inflation or…

A: Phillip curve refers to the single equation economic model, named after William Phillips, tells an…

Q: What are some limitations of the Classical Theory that Keynesian Theory learnt from and tried to…

A: Keynesian Theory  Keynesian economics is a macroeconomic theory of the economy's income spent and…

Q: If prices and wages are perfectly flexible, then γ = 0 and changes in aggregate demand have a…

A: Detailed Explanation: The statement is false.Here's why:γ (gamma) represents the sensitivity of…

Q: WP N'(rº) X (a) Current Labour Market (b) Current Goods Market N M X M M-PL(Y*,*+1) M", M (c)…

A: Real variables are defined as those variable where the effects of prices and/or inflation have been…

Q: Let us assume that the Bangladesh economy is in a recessionary gap right now with high unemployment…

A: The aggregate demand curve shows the negative relationship between price level and real GDP where…

Q: Economists are rethinking monetary and fiscal policy. That’s a potentially positive development.…

A: Monetary  Policy  :  Monetary  policy refers to the actions and decisions taken by a  cwntral bank…

Q: Identify and briefly describe the main ideas Keynesian economics is based on.

A: Answer: The main ideas of Keynesian economics are given below: (1). Demand creates its own supply:…

Q: An economy's aggregate demand curve (the relationship between short-run equilibrium output and…

A: Inflation refers to the situation where the general price level is increasing in the economy.

Q: Suppose rr = required reserve ratio = 0.1 C = currency in circulation = $1,200 billion D = checkable…

A: deposits is the amount a savers deposit in the bank in order to protect and earn some interest rate…

Q: Refer to the Reserve Bank news release below. Use the AD/AS model to answer how each of the economic…

A: Aggregate demand is the total demand for goods and services in an economy. AD=C+I+G+X-M  AS is the…

Q: Explain how policy makers can perfect their craft for the betterment of society

A: Public Policy is significant, on the grounds that it influences the ordinary person. Changes to…

Q: What role, if any, does monetary policy play in the Real Business Cycle Model?

A: Monetary policy refers to the actions and decisions taken by a country's central bank or monetary…

Q: Now that you have learned about the Keynesian perspective, what do you think about it?  In your…

A: Economics is the study of how the scarce resources of society are exploited. It is a social science…

Q: Provide arguments why should policymakers use fiscal and monetary instruments to control aggregate…

A: Meaning of Aggregate Demand and Aggregate Supply: The term aggregate demand refers to the…

Q: Assess the following event on the assumption that policymakers are using the Taylor rule as a basis…

A: To analyze the effect of an unexpected slowdown in productivity on the real interest rate, output,…

Q: What is the difference between the Keynesian and rational expectation theories concerning the…

A: Fiscal policy and monetary coverage are called financial stabilization rules that regularly cross…

Q: A Keynesian economy is described by the following equations. Consumption                       Cd =…

A: Keynesian economy states that AD(aggregate demand) has the potential to affect both output and…

Q: How does the self-correcting mechanism act to pull the economy out of a recession?

A: The measure that depicts the quantity of goods and services being demanded at various levels of…