In the classical model, what are the effects of an increase in government spending?

Classical economists recommend the following: O strong unions O minimum wage legislation O balancing the budget annually

What policy changes would Keynes recommend to counteract a recession?

How to calculate marginal propensity to save

Based on what you know about events in Europe after World War I, why does Keynes say the social and industrial changes on the European continent are “of a different kind altogether” from those in England? Explain.

In an economy, marginal propensity to consume (MPC) is 0.75 where Keynesian model works. Now, if government increases both its expenditure and taxes by 1000, then Income increases by 4000; Income increases by 3000; Income increases by 1000; Income do not change?

Suppose most business executives expect a slowdown in the economy (slower sales growth for their firm).  How might that affect the economy?

If government spending is permanently increased, consumption and investment would fail? True or False

How do households dissave?  Where do they get the money to finance their extra consumption?  Can everyone dissave at the same time?

Do you think there is a predictable relationship between the business cycle and aggregate investment spending ? Why or why not?