Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Chapter 11, Problem 8RQ
To determine
To Explain: The procyclical nature of various economic variables as per the Keynesian model.
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Explain why in our New-Keynesian model, equilibrium out- put (Y) and employment (N) are demand-determined. What is the key parameter driving this result? Explain.
Use the Keynesian Cross model to show an economy in a recession. Label all key points.
THE SIMPLE KEYNESIAN MACROECONOMIC MODEL CONCLUDES THE FOLLOWING ABOUT THE SOUTH AFRICAN ECONOMY
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- John Maynard Keynes spearheaded a new school of macroeconomic theory during the Great Depression. Which of the following represents a Keynesian point of view of macroeconomics?arrow_forwardIn the basic New Keynesian model. suppose that the anticipated future rate of inflation goes up due to a future increase in energy prices. Determine the effects and explainarrow_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_forward
- Which 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 unemploymentarrow_forwardExplain Keynesian policy for fighting unemployment and inflation.arrow_forwardExplain Various Assumptions of Classical Macro Economics Theory.arrow_forward
- What 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_forwardFriedman and Schwartz, Keynes, Hayek and Robins, Schumpeter, Hansen and Wilson, and Temin emphasize different forces in terms of the causes of the depression and it’s severity. Contrast the Keynesian view with two of the others that we have discussed.arrow_forwardDiscuss the basic principles of the New Keynesian Economics and how it addresses perceived limitations to classic Keynesian theory.arrow_forward
- During the severe economic downturn during the great recession the federal government provided an additional $600 per month to those who claimed unemployment. Based on what you know, explain how this aligns with Keynesian economic theory.arrow_forwardWhat would a Keynesian likely recommend in response to a recession?arrow_forwardPlease work out a keynesian model graphically, analytically and verbally. (standard model; no special cases).arrow_forward
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