MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 16.A, Problem 5SQ
To determine
The Keynesian approach to the recessionary gap in the economy.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Match the policies below to whether they would be said by a Keynesian or Neoclassical economist:
A. Policy should concentrate on minimizing cyclical unemployment
B. Since the long-run aggregate supply curve is fixed, increasing aggregate demand too much will just lead to inflation
1. Neoclassical
2. Keynesian
A. Illustrate and explain the impact that changes in the money supply have in the economy through a neoclassical perspective.
B. Illustrate and explain the impact that changes in the money supply have in the economy through a Keynesian perspective.
In the Keynesian model, an increase in government spending increases ___.
A.aggregate demand by an equal amount.
B.aggregate demand by a multiple amount.
C.the money supply by a multiple amount.
D.the money supply by an equal amount.
Chapter 16 Solutions
MACROECONOMICS FOR TODAY
Ch. 16.3 - Prob. 1.1YTECh. 16.3 - Prob. 2.1YTECh. 16.3 - Prob. 2.2YTECh. 16.A - Prob. 1SQPCh. 16.A - Prob. 2SQPCh. 16.A - Prob. 3SQPCh. 16.A - Prob. 4SQPCh. 16.A - Prob. 1SQCh. 16.A - Prob. 2SQCh. 16.A - Prob. 3SQ
Ch. 16.A - Prob. 4SQCh. 16.A - Prob. 5SQCh. 16.A - Prob. 6SQCh. 16.A - Prob. 7SQCh. 16.A - Prob. 8SQCh. 16.A - Prob. 9SQCh. 16.A - Prob. 10SQCh. 16.A - Prob. 11SQCh. 16.A - Prob. 12SQCh. 16.A - Prob. 13SQCh. 16.A - Prob. 14SQCh. 16.A - Prob. 15SQCh. 16 - Prob. 1SQPCh. 16 - Prob. 2SQPCh. 16 - Prob. 3SQPCh. 16 - Prob. 4SQPCh. 16 - Prob. 5SQPCh. 16 - Prob. 6SQPCh. 16 - Prob. 7SQPCh. 16 - Prob. 8SQPCh. 16 - Prob. 9SQPCh. 16 - Prob. 10SQPCh. 16 - Prob. 11SQPCh. 16 - Prob. 12SQPCh. 16 - Prob. 1SQCh. 16 - Prob. 2SQCh. 16 - Prob. 3SQCh. 16 - Prob. 4SQCh. 16 - Prob. 5SQCh. 16 - Prob. 6SQCh. 16 - Prob. 7SQCh. 16 - Prob. 8SQCh. 16 - Prob. 9SQCh. 16 - Prob. 10SQCh. 16 - Prob. 11SQCh. 16 - Prob. 12SQCh. 16 - Prob. 13SQCh. 16 - Prob. 14SQCh. 16 - Prob. 15SQCh. 16 - Prob. 16SQCh. 16 - Prob. 17SQCh. 16 - Prob. 18SQCh. 16 - Prob. 19SQCh. 16 - Prob. 20SQ
Knowledge Booster
Similar questions
- According to the Keynesian economists a. the economy will always seek a level of long-term full employment in the long run b. prices should fluctuate based on the wants of consumers c. markets will adjust itself shortages and surpluses d. All of the abovearrow_forwardThe horizontal segment of the Keynesian aggregate supply curve: A.depicts a negative relationship between real GDP and the price level. B.shows that real GDP can increase only by affecting the economy’s price level. C.depicts a positive relationship between real GDP and the price level. D.shows that real GDP can increase without affecting the economy’s price level.arrow_forwardReferring to the figure, an increase in government purchases will A. shift aggregate demand from AD1 to AD3. B. have no effect on aggregate demand. C. shift aggregate demand from AD1 to AD2. D. cause movement from point A to point B along AD1.arrow_forward
- In the Keynesian model, if there is a sudden rise in the aggregate demand curve, in the short run, it will cause a inflation b deflation c increase in output d a and carrow_forwardAccording to the neoclassical model, when the Federal Reserve implements expansionary monetary policy, a aggregate demand will decrease, price level will decrease, and output will remain the same. b aggregate demand will decrease, price level will decrease, and output will increase. c aggregate demand will increase, price level will increase, and output will remain the same. d aggregate demand will increase, price level will increase, and output will increase.arrow_forwardAccording to Keynesian economists, if people in the economy are not spending enough then the __________ should step in to fill the gap. a federal reserve b markets c federal government d banksarrow_forward
- The downward-sloping aggregate demand curve indicates that, ceteris paribus: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. there is an inverse relationship between demand and the average level of prices. a b a greater quantity of real GDP will be demanded at higher price levels than at lower price levels. C d a decrease in the price level leads to an increase in the quantity demanded of real GDP. inflation and output are directly related.arrow_forwardIn the Keynesian framework, which of the following events might cause a recession/inflation. Explain using the aggregate demand/aggregate supply. I only need the type of examples that go with the question though (Examples are crucial please!)  d. The interest rate rises e. The good imported from a major trading partner becomes much less expensive arrow_forwardKeynes believed that an increase in government expenditure during a recession would not result in significant inflation because he assumed that: Answers: A. Aggregate demand was vertical during a recession. B. The market would self-adjust to reach full employment. C. Aggregate supply was horizontal during a recession. D. The government would impose price ceilings during a recession.arrow_forward
- According to the Keynesian model, which of the following would increase aggregate demand the most? a. Government drops the taxes for private businesses b. Government establishes a new agency financed by the government that helps the unemployed to find a job Increase in interest rates that results in the growth in investments into new equipment to O d. A decrease in government expenditures accompanied by the decrease in taxes e. Government expands its social projects and increases taxes to balance the budgetarrow_forwardSuppose there is a negative TFP shock caused by a coronavirus. a. In response to the pandemic, the Fed bought a large amount of U.S. Treasury bonds from the public. How does that affect the money supply, if at all? Explain. b. In the neoclassical model, would an increase in the money supply affect real output or employment? Explain.arrow_forwardPlease note I only need help with Part 4 and 5. I have answers for the other parts. Thank you so much for your time and effort! Figure 2: Keynes’s AD-AS Model (Image normally goes here) Part 1:Changes in which factors could cause aggregate demand to shift from AD to AD1? What could happen to the unemployment rate? What could happen to the inflation rate? Part 2: The Keynesian AD-AS model describes what happens with price levels when aggregate demand increases. Could you find any evidence from the last ten-fifteen years that might support AD-AS model descriptions of demand-pull inflation, cost-push inflation, and recession? For example, you could find data on the GDP’s of any two countries from 2000 to 2017 to support your findings. Please note the followong for the next 3 parts of this. In macroeconomics, the immediate short run is known as a length of time when both input prices and output prices are fixed. In the short-run, input prices are fixed but output prices are variable. In…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc