According to classical economists economy produces-----level of GDP. According to Keynes economy produces------level of GDP. Full employment, equilibrium Equilibrium, full employment Less than full employment, less than equilibrium More than equilibrium, more than full employment

According to classical economists economy produces-----level of GDP. According to Keynes economy produces------level of GDP. Full employment, equilibrium Equilibrium, full employment Less than full employment, less than equilibrium More than equilibrium, more than full employment

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macroeconomics And The Self Regulating Economy

Section9.1: The Classical View

Problem 2ST

See similar textbooks

Related questions

Q: factor 2 is $12, in what proportions should the firm use factors 1 and 2 if it wants to maximize…

A: Production function exhibits the relationship between the inputs and the output. Profit is the…

Q: Utility Maximization Nate is currently spending his entire budget on two goods: food and…

A: Nate is currently spending his entire budget on two goods: food and entertainment. He was willing to…

Q: Suppose the domestic currency depreciates (E falls). Assume that domestic and foreign price levels…

A: The national currency exchanged for another nation's currency is known as the exchange rate. The…

Q: If income is rising faster in Japan than in the United States, there will be an increase in the…

A: The demand for currency refers to the desire or need for that currency in international markets. It…

Q: Mo increase production from 5 to 6 fire engines because the O True O False dominates in this…

A: The initial price at which the trucks are sold is $160,000. The price was reduced to $120,000. A…

Q: he Boston Celtics won the NBA Championship every year from 1959 to 1966. The HHI for championships…

A: The Herfindahl-Hirschman Index (HHI) is a commonly used measure of market concentration in economics…

Q: Which of the following is omitted from GDP calculations? O sales of used goods certain nonmarket…

A: Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and…

Q: Your insured has Comprehensive coverage on O.A.P. 1 Owner's Policy and informs you that he/she will…

A: Comprehensive Coverage: This is an element of an auto insurance policy that provides coverage for a…

Q: Figure: Demand 3 Price $20 18 16 14- 12 10 - 8 6 4 2 0 I MC = AC Demand 2 4 6 8 10 12 14 16 18 20…

A: Perfect competition: A firm in the competitive market is a price-taker because it has a large number…

Q: Mary has income of $2000 today and $1000 tomorrow. She can lend and borrow at an interest rate of…

A: Intertemporal Consumption Choice Decision: This is an example of the Intertemporal Consumption…

Q: Assume the Federal Reserve triples the growth rate of the quantity of money in circulation. In the…

A: The demand is defined as the desire of an individual to buy a product. The individual must have the…

Q: If products A and B are substitutes, products B and C are complements and the markets for products A…

A: Substitute goods:The change in the price of one good causes the quantity demanded of the other to…

Q: Suppose the inverse market demand is given by P-500-5Q. If the incumbent continues to produce 25…

A: A residual demand curve is present for each individual firm. This is the market need that other…

Q: The following data is available for three different alternatives. Assume an interest rate of 10% per…

A: Present worth, also known as present value or discounted value, is a fundamental concept in…

Q: 100 DRYERS 8 882 882229 90 80 30 20 O 4 O a. The economy has insufficient resources to produce at a…

A: Production possibility frontier curve: The production possibility frontier curve represents…

Q: An increase in the GDP price level will: Multiple Choice O O decrease aggregate demand increase…

A: Aggregate demand is the summation of all individuals demand of goods and service in a given year. AD…

Q: the balance of trade is $50 million and the balance of the capital account is-$40 million, what is…

A: Current account:The current account is part of the balance of payments accounts. The current account…

Q: The social responsibility of an organisation is to use its resources and engage in activities…

A: Corporate Social Responsibility (CSR) is a self-regulating business model that helps a company be…

Q: Read the following passage to answer the question: Various countries, including South Africa, China…

A: Economic growth refers to the expansion in the production of goods and services in an economy over a…

Q: Chris receives a portion of his income from his holdings of interest-bearing U.S. government bonds.…

A: The nominal interest rate refers to the interest rate stated on a loan or investment without…

Q: Refer to the figure below to answer the following questions. Real interest rate (percent per year G…

A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…

Q: (1) Write down each player’s best response functions and find all the Nash equilibria. (2) For each…

A: Game theory is a critical tool for economists in understanding and analyzing strategic interactions…

Q: The New York Times newspaper cost $0.15 in 1970 and $0.75 in 2000. The average wage in…

A: The purchasing power of currency refsr to the quantity of items and services that can be purchased…

Q: Which of the following could cause a change in the feasible region? Removing a redundant constraint…

A: Linear Programming:It is a technique that is used to minimize costs and maximize profit. We do this…

Q: Suppose a country which produces only agricultural goods and electronic goods. Both goods use…

A: A production possibility curve (PPC), also known as a production possibility frontier (PPF), is a…

Q: Ella owns a factory that produces kitchen knives. She has eight employees, with which her factory…

A: Production is the process of transforming the inputs into outputs. and here inputs are capital and…

Q: Required information 1. An increase in price; 2. A decrease in price; 3. No change in price; er to…

A: Given that there is a decrease in the price of substitute of good X. Substitute goods: Good X and…

Q: Stephen and Rebecca both enjoy drinking coffee. The marginal benefit that each places on the coffee…

A: Marginal benefit is the maximum amount of money a consumer is willing to pay for an additional good…

Q: here p is the price (in dollars) of a chair. (a) According to the model, at what price will…

A: Demand schedule represents negative relationship between the price and the quantity demand. It…

Q: The short-run economic outcome resulting from the increase in production costs is known as Now…

A: This can be defined as a concept that shows the level of output in a market or economy where the…

Q: Question 4 If the semi-elasticity between x and y is -2, what does it mean? A. When x decreases by…

A: A semi-elasticity between X and Y is defined as the percentage change in Y for a unit change in X

Q: The stream of commerce theory of jurisdiction states that a court will have jurisdiction over a…

A: The statement given is about the “stream of commerce theory of jurisdiction”. This theory posits…

Q: Considering the slope of the perceived demand curves faced by the firms in the four market…

A: Demand refers to the quantity of a goods or services that a person is willing and able to buy at a…

Q: The invention of money helped society get around the problem of ___________________________. A)…

A: It can be defined as a concept that shows how much currency of one nation is valuable in terms of…

Q: Which of the following topics would be covered in macroeconomics? the effects of an increase in…

A: Macroeconomics is the study of economics that deals with the behaviour of aggregate economy

Q: concept Question 1.4 Suppose a student is trying to decide whether or not to take another economics…

A: Economics is the branch of social science which is concerned with how individuals and organisations…

Q: Emma likes to call her friend regularly during the month, but he lives abroad. A call costs him…

A: Cost of call = 5 per minute Benefit for first 100 minutes = 10 per minute Benefit for second 100…

Q: Value of Money 2 1 MS₁ MS2 41 с B Money Demand Quantity of Money money supply is MS1 and the value…

A: The money supply can be described as the whole quantity of money that is in circulation (i.e. cash,…

Q: One hundred persons were asked, "Do you favour regional integration?". Of the 35 that answered "no"…

A: The given question has been answered from the perspective of 'Econometrics'.A contingency table is a…

Q: The following graph shows the market for laptops in 2009. Between 2009 and 2010, the equilibrium…

A: Demand curve represents quantity demanded corresponding to different price level. Demand curve is…

Q: Exercise 5 For each of the production functions below: (1) find the marginal product of labor (i.e.,…

A: Production function : q (L ,K ) = 5L0.75K0.25Where , L : labor input K : Capital input Hi there , as…

Q: Suppose that your tuition to attend college is $10,000 per year and you spend $4,000 per year on…

A: The opportunity cost is the potential loss that is sacrificed when one option is selected over…

Q: Which condition would generate a violation of the Ricardian Equivalence? downward sloping labor…

A: This can be described as various forms of money that is used by the individual, institute, or any…

Q: Answer the question based on the following information: Suppose 55 units of product Z can be…

A: Production function:Production is a function of land labor capital and entrepreneurship. It includes…

Q: A firm has the production function Q(L, K) = √K + 2√L. The price of one unit of capital is R > 0,…

A: Production function: The price of capital is R and the price of labor is W.The marginal rate of…

Q: Suppose broccoli is an inferior good. Suppose further that national income is decreasing. Everything…

A: Given that broccoli is an inferior good. A good is said to be inferior good is the demand for that…

Q: According to the short-run Phillips curve, when actual output is unemployment rate rises. above;…

A: Phillips curve refers to a curve that shows an inverse relationship between inflation rate and…

Q: 3. Using demand and supply analysis, graphically illustrate how the equilibrium price and quantity…

A: Demand :Demand is when a consumer has the desire to buy something at the price that he is ready to…

Q: the effectiveness of measures taken by their government to stabilize the Vietnam economy during…

A: Monetary Policy:Monetary policy refers to the actions and decisions taken by a country's central…

Q: In the long run, an increase in government purchases will raise the price level, but not production…

A: Government purchases are a component of a country's aggregate demand, representing the total…

Question

According to classical economists economy produces-----level of GDP. According to Keynes economy produces------level of GDP.

Full employment, equilibrium

Equilibrium, full employment

Less than full employment, less than equilibrium

More than equilibrium, more than full employment

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define classical economics

VIEW

Step 2: Explain the correct option

VIEW

Step 3: Explain why other options are incorrect

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Defend or Refute. “John Maynard Keynes rejected the theory of classical economics that there will be an automatic adjustment in the economy when there is a deviation in the economy from full- employment. Keynes added that the government should intervene in the economy by spending more to induce the income and spending of the people”. Explain your position.
Potential real GDP is defined as: Group of answer choices The quantity of output that the economy can produce when it is above the natural rate of unemployment. The quantity of output that the economy can produce when it is at less than potential employment of its resources. The macro equilibrium The quantity of output that the economy can produce when it is at full employment of its labor and physical capital.
In the Keynesian cross, the economy is in equilibrium when planned expenditure equals actual expenditure. However, when planned expenditure exceeds actual expenditure, unplanned inventory investment is ________, causing output to ________. a. negative; fall b. positive; fall c. positive; rise d. negative; rise
Economic Adjustments Suppose the economy is at point c. A Keynesian economist would advocate Group of answer choices allowing the economy's self-correcting mechanism to move the economy to point a. pursuing expansionary fiscal policies to move the economy to point a. pursuing expansionary fiscal policies to move the economy to point b. pursuing expansionary fiscal policies to move the economy to point d.05
One of Friedman’ s criticisms of Keynes was Multiple Choice current consumption depends only on current income. interest rates and money can influence real GDP. wages are sticky both upward and downward. inflation and unemployment are indirectly related.
How is it possible for the economy to have an inflationary gap? a. GDP is falling at full employment. b. Equilibrium is at a GDP level above full employment. c. GDP is rising at full employment. d. Equilibrium is at a GDP level below full employment. e. Equilibrium is at a GDP level equal to full employment.