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.

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.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter8: The Keynesian Model

Section: Chapter Questions

Problem 5SQ

See similar textbooks

Similar questions

To fight recession, a Keynesian economist would: (Select all that apply) A. Increase Taxes B. Decrease Taxes C. Increase Government Spending D. Decrease Government Spending
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
Please answer the following question. Thanks! Consider a classical economy described as follows: ? = ?^(1/2)?^(1/2) , where L is the amount of labor and K is the amount of capital. The economy has 10,000 units of labor and 10,000 units of capital. Consumption (C): 5,020-100r, Investment (I) : 2,000-100r, Taxes (T): 2,500, Government Purchases (G) :3,000
If a Keynesian economist were asked to make a statement about the relationship between the government and the economy, what might she say? a. “Government intervention in the economy is sometimes necessary.” b. “Government intervention is the only solution for economic problems.” c. “It is never a good idea for the government to intervene in the economy.” d. “The government should be primarily concerned with public safety and health.” e. “The government’s only role is to provide defense and protect property rights.”
Why Keynes argues that the “Classical” approach is a “special case” while his approach is the “general case”?