5: The Keynesian model is based on different assumptions compaired with the neoclassic idea. a) What is the background of the idea of 'effective demand'?
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- What is the Keynesian prescription for recession? For inflation?1) Identify key assumption underlying Keynesian and Classical approaches to macroeconomic analysis. In your answer indentify how Keynesian and CLassical economist differ regarding understandign about the business cycle and how the economy should best be managed ?1. Which of the following is not an assumption of the simple Keynesian model ? (a). We are in the short -run (b).Prices are constant (c).Output is demand -determine (d). Output is supply -determine (e). Aggregate output equals planned expenditure. 2. Which of the following is not one of the principal economic goals for the economy ? (a). Economic growth (b).Stable prizes (c). Strong national defense (d). Full employment (e). A strong cedi 3. Which is not a cause for business cycles considered by macroeconomists. (a). Greed (b) variations in optimism (c) shocks to money supply (d) shocks to technological ability 4. Which of the following question is of most interest for macroeconomics. (a). Why do foreigners immigrate to Ghana. (b).What is the appropriate stance of antitrust policy (c)Why is there inflation (d). What does the steel industry wants to tariffs 5. Which of the following statement is true ? (a). Final goods as produce in the same year as the related final good…
- 1. Why is the aggregate demand curve downward sloping? 2. What factors may cause the short run and the long run aggregate supply curves to shift? 3. What is the Classical view of economic management and how is this different from Keynesian's view? Detailed answer with relevant examples if it applies. Thank you15. Which of the following makes expansionary Keynesian policy unavailable? a) Crowding out effect b) Inflation c) transactions demand for money d) sovereign debt crisis e) All the above1.) The Keynesian AD-AS model describes what happens with price levels when aggregate demand increases. Could you find any evidence from the last ten-fifteen years that might support AD-AS model descriptions of demand-pull inflation, cost-push inflation, and recession? For example, you could find data on the GDP’s of any two countries from 2000 to 2017 to support your findings. 2.) In macroeconomics, the immediate short run is known as a length of time when both input prices and output prices are fixed. In the short-run, input prices are fixed but output prices are variable. In the long run, input prices and output prices can vary. What happens in the immediate short-run when AD falls from AD to AD2 to the price level and output? What happens in the short-run when AD falls from AD to AD2 to the price level and output? What will happen in the long-run?
- 10. Which of the following are reasons why the short-run Aggregate Supply curve shown in the right-hand diagrams may be vertical? a) The economy at this level of real GDP would be operating beyond the full-employmetn level. b) Inflationary expectations have set-in so, the owners of resources are acting on these inflationary expectations and insisting on higher resource prices in anticipation of future products price inflation. c) Short-run Aggregate Suply in the Classical model is always constant. d) All the above e) Only (a) and (b) are true. f) None of the above.In a Keynesian framework, using an AD/AS diagram, which of the following government policy choices offer a possible solution to recession? Which offer a possible solution to Inflation? A tax Increase on consumer income. A surge in military spending. A reduction in (axes for businesses that Increase investment. A major Increase in what the U.S. government spends on healthcare.In the Keynesian framework, which of the following events might cause a recession? Which might cause inflation? Sketch AD/AS diagrams to illustrate your answers. A large Increase In the price of the homes people own. Rapid growth in the economy of a major trading partner. The development of a major new technology offers profitable opportunities for business. The Interest rate rises. The good imported from a major trading partner become much less expensive.
- Economists from all theoretical persuasions criticized the American Recovery and Reinvestment Act. The Stimulus Package was arguably a Keynesian measure so why would a Keynesian economist be critical of it? Why would neoclassical economists be critical?List three practical problems with the Keynesian perspective.1. Which of the following is not an assumption of the simple Keynesian ? (a).We are in the short run (b). Prices are constant (c).Output is demand -determine (d). Output is supply -determine (e). Aggregate output is equals planned expenditure 3. Equilibrium in the market for bank reserves determine. 4. The consumer prices index (CPS) baskets of goods typically consumed in period 2 goods .
