Keynesian economics defends budget balance. However, according to economists, budget balance may exacerbate the effects of the business cycle. Isn't it also a Keynesian view to use discretionary policy to smoothen the business cycles? Aren't those two views contradictory?

Q: Is there a limit to government spending in regards to keynesian economics? Can we print as much…

A: Keynesian economics Keynesian economics is founded on two basic ideas: (1) aggregate demand, rather…

Q: Identify the various policy choices available when an economy experiences an inflationary or…

A: Inflationary gap refers to the situation when economy's real output is more than its potential…

Q: If the economy above was at point D, a good thing to do would be to increase government spending.…

A: Increasing government spending or reducing government spending to energize a sluggish economy,…

Q: What might be some Keynesian prescriptions to get the economy out of an economic slump (both fiscal…

A: Under the Keynesian theory, the aggregate demand is given by the sum of consumption demand (C),…

Q: Suppose the economy suffers a high rate of inflation According to Keynesian economists, the…

A: We are going to explain the relationship between inflation rate and fiscal contractionary policy to…

Q: Why do economists often disagree about the conduct of macroeconomic stabilization policy?

A: Economic growth can take place only if the economy is stabilised. Macroeconomic stabilisation is a…

Q: Which group of economists believe that without government help the economy could tend toward less…

A: Government intervention is recommended when the economy operates below the full employment level.

Q: Identify and briefly describe the main ideas Keynesian economics is based on.

A: Answer: The main ideas of Keynesian economics are given below: (1). Demand creates its own supply:…

Q: Why might keynesians be considered to be the "demand sliders" while classicalists could be…

A: Keynesians mostly focus on demand side economics. According to this theory, the problem of…

Q: When a goverment takes steps to decrease the interest rate, how does this affect borrowers? How…

A: Interest rate: A loan fee is the level of chief charged by the moneylender to utilise its cash. The…

Q: Fiscal policy can be classified into which two groups? A. Keynesian and classical B. discretionary &…

A: Fiscal policy refers to the government action to influence the market by making changes in taxation…

Q: In recent years, the US and few developed countries have interest rates falling to very low levels.…

A: Answer - Need to find- In recent years, the US and few developed countries have interest rates…

Q: Explain how policy makers can perfect their craft for the betterment of society

A: Public Policy is significant, on the grounds that it influences the ordinary person. Changes to…

Q: Keynesian Assault on Classical Economics: Why did a drastic change in the economic atmosphere of the…

A: Economics is the study of how the scarce resources of society are exploited. It is a social science…

Q: According to Keynes, what are the major sources of economic instability? Fiscal policy is spending…

A: According to Keynes, the major cause of economic instability is insufficient AD i.e. aggregate…

Q: Using the AD/AS Model, construct 2 graphs that show how a recession can occur. Explain how…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: The Keynesian Side of economics focuses on explaining why recessions and depressions occur, as well…

A: Keynesian side of economics believed that if the market is left uncontrolled then it leads to a…

Q: According to Keynesians, when should the federal government run a deficit and when should it run a…

A: The Keynesians recommend the active intervention of government in economic activities to deal with…

Q: From a Keynesian point of view, which is more likely to cause a recession: aggregate demand or…

A: Keynesian talked about Aggregate demand, he emphasized more on government intervention to correct…

Q: According to Keynesians, when should the federal government run a budget deficit and when should it…

A: The use of fiscal policy was made popular by John Maynard Keynes, after whom the Keynesian economics…

Q: Assuming a constant money supply, government expenditures can be financed by which of the following?…

A: The money supply helps the economy to grow by increasing the purchasing power on one hand while it…

Q: Suppose in the country of Miltonia, Ricardian equivalence is 100% true. A- If Miltonian tax rates…

A: One of the most commonly used theories of Professor David Ricardo is the concept of comparative…

Q: According to Keynesian  economics, what impact would a balanced budget  amendment to the constuition…

A: Balancing budget is tough to achieve in the short term due to fluctuating factors in the economy.…

Q: Analyze and compare fiscal and monetary policy in order the generate macroeconomic stability. Which…

A: Introduction Fiscal policy can contribute to macroeconomic stability by bolstering aggregate demand…

Q: Why might a Keynesian Economist argue that a Federal Reserve policy alone will not get us out of a…

A: Recession explains the market situation when the whole country is facing a downturn in aggregate…

Q: Keynesian economists argue that facing an economic recession. and are the surest way to ensure full…

A: The economies around the world tend to depend upon the working of the government, and also the…

Q: According to Keynesian economics, what impact would a balanced budget amendment to the constitution…

A: A balanced budget amendment is a constitutional requirement that a state's spending cannot exceed…

Q: Why Keynesian economics become popular back in 1930’s. Do you think that during 2005-08 financial…

A: Keynesian economics was a focus made by J.M Keynes to understand the great depression of 1930. His…

Q: What effect do you think this federal government shutdown may have had on the Keynesian C + I + G +…

A: Government shutdown is defined as the termination of unnecessary government administration and…

Q: Explain how Classical and Keynesian economists view the use of active government to maintain full…

A: In economics, two major approaches to analyze an economy is classical economics and Keynesian…

Q: How would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about…

A: "Recession means reduction or fall in the economic activity and this fall is visible in real GDP,…

Q: Why would government use "discretionary macroeconomic stabilization policy?

A: The macroeconomic policy goal is to have a secure economic climate favorable to substantial and…

Q: Contrast the appropriate Keynesian response to an economy experiencing recession with the…

A: Meaning of Inflation: Inflation generally arises when there is an excessive increase in the level…

Q: Which statement is most likely consistent with the classical view? A.The Congress should set…

A: The classical economic theory developed shortly after the birth of Western capitalism. It refers to…

Q: An economist who believes the economy is self-regulating is more likely to advocate laissez-faire…

A: The self-regulating economy means that the economy does not need any special interference by any…

Q: Household behavior that is not responsive to budget deficit policies is a concept put forward by...…

A: Budget deficit happens when the income of the government falls short of its expenses. In such cases,…

Q: The Great Depression undermined the credibility of the classical view. Correspondingly, the high…

A: Classical view believes that the individuals and firms act in their own interest the supply creates…

Q: With the aid of a diagram and using the Keynesian analysis, explain in detail how income and…

A: Keynesian analysis suggested that best way to move an economy out of recession was to increase…