Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 11, Problem 2CQ
To determine
Keynesian view on the causes of fluctuation in output, and restoring the economy to the equilibrium position.
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Chapter 11 Solutions
Macroeconomics: Private and Public Choice (MindTap Course List)
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- In the Keynesian model (that is, the short run), what causes recessions?arrow_forwardWhat is the Keynesian prescription for recession? For inflation?arrow_forwardWhat industry sectors are most likely to add jobs during a down economy and an improving economy respectively? Are there employment sectors that are essentially unaffected by economic fluctuations?arrow_forward
- What policy changes would Keynes recommend to counteract a recession?arrow_forwardWhat is Global Keynesianism?arrow_forwardCreate a graph that shows where Mexico currently is on the business cycle. Be sure to include an AD-AS Model graph that shows if the economy is currently experiencing a recessionary gap, expansionary gap, or long run equilibrium.arrow_forward
- Explain how might positive thinking help an economy expand? Demonstrate your explanation using the AD / AS graph as part of your answer.arrow_forwardSuppose the economy is operating at potential GDP when it experiences an increase in export demand. How might the economy increase production of exports to meet this demand, given that the economy is already at full employment?arrow_forwardDoes the graph above reflect a Classical Model or a Keynesian Model? How do you know? What is happening in this economy in the short run?arrow_forward
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