Compare the views of Keynesian and mainstream economists on the effects fiscal stimulus has on real GDP and employment
What will be an ideal response?
Keynesian economists believe fiscal stimulus results in a boost of real GDP and employment as a result of the multiplier effect. Mainstream economists believe the Keynesian economists overstate the size of the multiplier. They believe the stimulus "crowds out" private expenditures and investments and create a greater burden of government debt on future generations.
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Assuming that Yd = $20,000 and C = $22,000, we would find that the average propensity to consume would be equal to
A) 0.8. B) 1.8. C) 1.1. D) 0.9.
When people like yourself hold money in the event that a good opportunity may arise, such as the opportunity to purchase high interest-bearing assets, economists classify this money as satisfying your
a. precautionary motive b. transactions motive c. speculative motive d. liquidity motive e. investment motive
Equality means distributing society's resources in the most efficient manner
a. True b. False Indicate whether the statement is true or false
United States Government Source of Funds and Outlays, Fiscal 2011
What will be an ideal response?