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Compare and contrast the Keynesian and Monetarist in business cycle theories
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- Compare and contrast the Keynesian approach to the management of the level of aggregate demand to the Monetarist (classical) macroeconomic models.Suppose that currently, the South African economy is in an expansionary phase. The proposed “Exit tax” by the National Treasury would resemble which of the following macroeconomic schools of thought? a) Keynesian theory b) Classical theorists c) Marxist economics d) Monetarist economicsIf most business cycles are due to inflation shocks, then why is this an argument for passive policy set by rules and not active policy set by discretion?
- Three of the following are economic policies advocated by the Monetarist critics of Keynesian macroeconomics. Which three are they? (a) Privatisation combined with deregulation; (b) Promoting increased labour mobility; (c) Management of Aggregate Demand combined with strict legal controls (d) Trade Union reform.How were the Keynesian, Monetarist and New Classical theories of the economy synthesized to develop the New Keynesian Economics?Literature review of Phillip curve theory between Keynesian and monetarist
- To examine the relationship between unemployment and inflation by using Phillip curve ….there is conflict between Keynesian economist and monetaristIn the New Keynesian model, how should the central bank change its target interest rate in response to each of the following shocks? Use diagrams and explain your results. There is a shift in money demand. Total factor productivity is expected to decrease in the future. Total factor productivity decreases in the present.In the basic New Keynesian model, if anticipated future inflation decreases and the central bank does not change its interest rate target in response, then A. output rises and inflation rises. B. output stays the same and inflation falls. C. output falls and inflation falls. D. output and inflation stay the same. E. output rises and inflation falls.
- What role, if any, does monetary policy play in the Real Business Cycle Model?Which of the following are business cycle theories that regard fluctuations in aggregate demand as the factor that is creating business cycles? I) Keynesian cycle theory II) Real business cycle theory III) Monetarist cycle theory Select one: (a) I, II and III (b) I and II (c) I and III (d) I onlyWhat evidence have you discovered that points to the Classical, Keynesian, and Monetarist theories being debated today?
