John Maynard Keynes stated that “In the long run we are all dead!” Explain what he meant by this.
What will be an ideal response?
Keynes was made this statement to criticize economists who believed the federal government should not intervene in the economy during a recession. Some economists argued that the government should not focus on short-term problems with the economy, but rather on the long-run. Keynes argued that the short-term is also important.
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Quantitative evidence from Fishlow, Fogel and Mercer indicates that
a. antebellum railroads were built ahead of demand, but post-bellum transcontinentals were not. b. post-bellum transcontinentals were built ahead of demand, but antebellum railroads were not. c. both antebellum railroads and post-bellum railroads were built ahead of demand. d. antebellum railroads were not built ahead of demand, but the evidence on post-bellum railroads is mixed.
Which of the following events would shift money demand to the left?
a. an increase in the price level b. a decrease in the price level c. an increase in the interest rate d. a decrease in the interest rate
Real income will fall whenever:
A. wages increase faster than prices. B. wages increase and prices stay the same. C. prices and wages increase at the same rate. D. prices increase faster than wages.
Which of the following is true? a. The tax multiplier is smaller than the government spending multiplier
b. The government cannot stimulate consumer spending through tax cuts. c. The government spending multiplier is smaller than the tax multiplier. d. The government can stimulate consumer spending through decreases in transfer payments.