Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 11, Problem 10CQ
To determine
Keynesians’ view on sending checks to householders and its effects in the economy.
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Why would a Keynesian policy response not make much sense in response to a minor recession like the one that occurred in 1990?
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Chapter 11 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- The Keynesian theory was first introduced in 1936. Why was it presented at that time, and what policy implications did it have?arrow_forwardIn 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 loansarrow_forwardWhat is the Keynesian prescription for recession? For inflation?arrow_forward
- According to Keynesian business cycle theory, what should the government do in response to a recession?arrow_forwardNow think about a major recession, like the one that occurred in 1982. (Hint: a major recession could be caused by a large shift to the left in the AD curve.) Why would a Keynesian policy make more sense in response to a major recession like the one that occurred in 1982? What would be the cost of following a neoclassical policy then?arrow_forwardWhat is the philosophical, economic essence of Keynesian doctrine or “Keynesianism” that emerged from the experience and attempted explanations of the Great Depression ? What would all Keynesians believe, in order to be “Keynesian?”arrow_forward
- Explain Keynesian policy for fighting unemployment and inflation.arrow_forwardIn recent years, the US and few developed countries have interest rates falling to very low levels. Explain this situation according to Keynesian theory.arrow_forwardThe AD/AS model is static. It shows a snapshot of the economy at a given point in time. Both economic growth and inflation are dynamic phenomena. Suppose economic growth is 3% per year and aggregate demand is growing at the same rate. What does the AD/AS model say the inflation rate should be?arrow_forward
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