Contrast the appropriate Keynesian response in an economy experiencing recession with the appropriate Keynesian response in an economy experiencing inflationary pressures
If an economy is in recession with respect to an equilibrium at potential gross domestic product, then the Keynesian response would be to enact a policy that would shift the aggregate demand curve upward. The appropriate Keynesian response to a recessionary gap is for the government to reduce net taxes or increase government spending, so that the aggregate expenditure line shifts up until the equilibrium level is equal to potential GDP.
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During a time of an economic downturn, it is likely that projected tax revenues will be __________ than anticipated, and expenditures will be _______ than anticipated.
A. higher; higher B. lower; lower C. lower; higher D. higher; lower
Which of the following claims concerning the importance of effects that explain the slope of the U.S. aggregate-demand curve is correct?
a. The exchange-rate effect is relatively small because exports and imports are a small part of real GDP. b. The interest-rate effect is relatively small because investment spending is not very responsive to interest rate changes. c. The wealth effect is relatively large because money holdings are a significant portion of most households' wealth. d. None of the above is correct.
Getting a scholarship because of good grades is an example of
a. extrinsic reinforcement b. intrinsic reinforcement c. motivation d. ERG theory
Refer to the table shown. If the number of workers is three, total output is:Number of workersMarginal product of workers1225394145166177188189171015
A. 16. B. 27. C. 9. D. 36.