Which of the following economic theories became popular in the 1930s in response to the shortcomings of existing theories of the Great Depression?
a. New classical theory
b. Classical theory
c. Traditional Keynesian theory
d. Monetarist theory
e. New Keynesian theory
c
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Describe Keynesian Economics as it pertains to GDP
What would be an ideal response?
Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP
A) $25 of additional saving. B) $56.25 of additional consumption spending. C) $25 of additional saving and taxes. D) $75 of additional real disposable income.
An example of moral hazard is
a. workers working diligently even though the boss is not looking b. health care insured employees forgoing their diet and exercise c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds exactly as the bank requires
Many in Congress expect that future Social Security tax collections will fall short of the sum that will be needed to cover promised benefits. How can it cover this shortfall, and what are the problems associated with these solutions?