As portrayed in terms of total expenditures (TE) and total production (TP), discuss at least three assumptions that sum up the workings of the simple Keynesian model
The simple Keynesian model can be summarized as follows: (1 ) The price level is constant until Natural Real GDP is reached. (2 ) If C, I, or G changes, the TE curve will shift. (3 ) The economy could be in equilibrium and in a recessionary gap simultaneously. (4 ) The private sector may not be able to remove itself from a recessionary gap. (5 ) The government may have to intervene to help push the economy so that it moves out of a recessionary gap and to its Natural Real GDP level.
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Experiments:
A. make it easier to determine whether people's choices are consistent with standard economic theory, but can make it harder to establish causality. B. often make it easier to establish causality, but can make it harder to determine whether people's choices are consistent with standard economic theory. C. make it easier both to establish causality and to determine whether people's choices are consistent with standard economic theory. D. make it harder both to establish causality and to determine whether people's choices are consistent with standard economic theory.
Which of the following favors government policies to stimulate the economy by creating incentives for individuals and businesses to increase their productive efforts?
a. supply-side economics. b. Keynesian economics. c. monetarist economics. d. Marxian economics.
Which of the following is true of Western Europe, Japan, Canada, Mexico, and China taken together?
a. All these countries are classified as high-income countries by the World Bank. b. They are all members of the North American Free Trade Agreement [NAFTA]. c. All these countries are considered developing countries by the World Bank. d. They are collectively the largest trade partners of the U.S. e. They are the five largest exporters of agricultural produce in the world.
A risk-averse person has
a. utility and marginal utility curves that slope upward. b. utility and marginal utility curves that slope downward. c. a utility curve that slopes down and a marginal utility curve that slopes upward. d. a utility curve that slopes upward and a marginal utility curve that slopes downward.