Answered: Why did Keynes’s conjectures hold up…

Why did Keynes’s conjectures hold up well in the studies of household data and short time-series, but fail when long time-series were examined?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 12E

See similar textbooks

Related questions

Q: What are some problems with Keynesian business cycle theory? A. It does not predict stagflation B.…

A: According to Keynes, the vacillations in the marginal efficiency of capital lead to the business…

Q: Using appropriate real-life macroeconomic example(s), compare and contrast Keynes' Law and Say's Law…

Q: In the simplest (or introductory) form of the Keynesian model, which of the following decisions can…

A: Keynesian model: The Keynesian model can be used to evaluate decisions about unneeded savings and…

Q: Discuss how Keynesian economic can help a country facing an economic recession.

A: Monetary policy describes or portrays the actions taken by the monetary authority of the nation…

Q: What was Keynes’s solution to the Depression?

A: Keynesian economics was first highlighted during the Great Depression because it was considered as…

Q: Based on what you know about events in Europe after World War I, why does Keynes say the social and…

A: England was having more government and democratic system than other european countries after world…

Q: In both the classical and Keynesian model, the interest rate falls in a recession. O True O False

A: The amount being due per period being as a proportion of the amount that is either being deposited,…

Q: Suppose the economy is experiencing a recession with high unemployment. With a goal of increasing…

A: Recession When there is a general fall in economic activity, there is a recession, which is a…

Q: How does New Keynesian and early Keynesian differ? What are the possible explanation for this…

A: The two basic school of economic reflecting two major views are: Classical economics and Keynesian…

Q: Economic variables are sometimes divided into “leading indicators” and “lagging indicators.” Leading…

A: Recession A recession in the economy refers to the situation in which the aggregate demand in the…

Q: According to Keynes, interest is a payment for

A: To find : Interest is a payment for

Q: In the Simple Keynesian Macroeconomic Model, which of the following will determine the level of…

A: "The level of autonomous spending by households is dictated by the level of autonomous consumption…

Q: Price level LRAS (GDP deflator, 2000 - 100) SRAS Real GDP (trillions of 2000 dollars) In the figure…

A: A No action is needed as wages would go down and shift AS curve to the left Classical economic…

Q: What were John Maynard Keynes views of the causes of recessions and solutions to fixing them?

A: A recession is a situation of economic contraction, where businesses experience low demand and there…

Q: In our four main macroeconomic models, which of the following statements is false? Our macro models…

A: Macroeconomics is a broad field. However, there are two specific disciplines of research that…

Q: Question Two a) Use the Keynesian Cross to derive the IS curve

A: IS curve shows combinations of interest rates and levels of output such that planned (desired)…

Q: Do you remember the Harrod-Domar model? Derive it and apply it to a numerical case where d=4%,…

A: d = 4% s = 35% gy = 8% S is expected to rise by 45% next year

Q: A key difference between the new classical and the new Keynesian views of the business cycle is the…

A: There are four economic theories mainly New classical economics, Keynesian economics, supply side…

Q: Please work out a keynesian model graphically, analytically and verbally. (standard model; no…

A: The Keynesian economics would result in the models arising from the solution of the great depression…

Q: In which ways the product-cycle model inconsistent with the Heckscher-Ohlin model? In which ways are…

A: Trade: It refers to the goods and services that has been exchanged in the countries. The trade helps…

Q: Use the Keynesian Cross model to show an economy in a recession. Label all key points.

A: A recession in an economy is characterized by low aggregate-demand (or aggregate-expenditure),…

Q: anet, a mother of two, decides to reduce her working hours to spend more time with her children. By…

A: The statement is uncertain to conclude about the quality of life of Janet being low.

Q: describing the economic viewpoints and theories of John Maynard Keynes. What were his views of the…

A: When studying the economy using different schools of economic thoughts, John Maynard Keynes was one…

Q: E. Is unemployment rate a determinant of the murder rate in this data? Answer "YES" or…

A: Answer - Given in the question-

Q: Who favors John Maynard Keynes theories currently and how are they applied?

A: John Maynard Keynes is an British economist who developed Keynesian economics in 1930s in order to…

Q: According to Keynesian business cycle theory, what should the government do in response to a…

A: A recession is a situation in which economic activities start to decline in the economy of a…

Q: What happens in the circular flow model during a recession.

A: The circular flow model represent show money flows from one economics sector to another and how it…

Q: Suppose you are interested in isolating the cyclical component of a macroeconomic time series (such…

A: The time series viewpoint—cycles being dictated by different arbitrary shocks which are proliferated…

Q: What are the principal differences between the Neoclassical and Keynesian approaches with examples

A: Neoclassical and Keynesian approaches provide varied Macroeconomic interpretations. The…

Q: How is Keynes position different from classical position with respect to wages, prices, and Say’s…

A: Classical Position on Wages, Prices and Say's law: The classical economist emphasized the…

Q: According to Keynes, nominal wage increases mostly and directly lead to a inflationary development a…

A: Inflation: - Inflation is the phenomenon of an increase in the prices of goods and services in an…

Q: In what words did the scholars criticize Keynes's approach?

A: Prof. Keynes established the definitional or accounting equality of savings and investment, it has…

Q: In the Keynesian Cross model, if government spending is raised by $100 million income must a. rise…

A: The expenditure-output model, often known as the Keynesian cross diagram, depicts how aggregate…

Q: Which of the following macroeconomic variables is procyclical and leads the business cycle?

A: Economic indicators are generally three types:- 1 - Procyclical variable A variable can be said as…

Q: Using the model for a closed economy, if the nominal wage is $40 and we have a Cobb-Douglas…

A: Cobb douglas production function: Y = KαL1-α α = 0.2 (given) => Y = K0.2L1-0.2 => Y = K0.2L0.8…

Q: Contrast Say’s law with Keynes Law, do they provide completely different interpretations of…

A: Say and Keynes provide different interpretation of macroeconomic behavior. Keynes interpretation…

Q: How does AD/AS Model Incorporates Economic Growth, unemployment, and inflation. Identify periods of…

A: Aggregate demand refers to the amount of sales proceeds which an entrepreneur actually except from…

Q: Critically evaluate“ the macroeconomics of MMT is a restatement of elementary well-understood…

A: Modern Money Theory (MMT) cannot work as an effective and sustainable macroeconomic policy program…

Question

Why did Keynes’s conjectures hold up well in the studies of household data and short time-series, but fail when long time-series were examined?

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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

list four differences between new keynesian and real business cycle models?
Consider an AS AD diagram. What would happen in the model if Energy prices increased? Group of answer choices a. AD shifts right and prices increase while real GDP increases b. AS shifts left and prices increase while real GDP decreases c. AS shifts right and prices decrease while real GDP increases d. AD shifts left and prices decreases while real GDP decreases
Do you remember the Harrod-Domar model? Derive it and apply it to a numerical case where d=4%, s=35%, and gY=8% last year. If s is expected to rise to 45% next year, what will happen to gY?
What was Keynes’s solution to the Depression?
Contrast Say’s law with Keynes Law, do they provide completely different interpretations of macroeconomic behavior? Provide examples
Contrast the Keynesian and neoclassical approaches to responding to a recession. Assess how modern macroeconomists might blend elements of each perspective in their economic modeling.
A key difference between neoclassical and Keynesian economists is how to predict and treat the future growth of the economy. Neoclassicalists believe the focus should be on ____________ and Keynesians believe the focus should be on _________________. A, B, C, OR D ONE ANSWER A short-term problems; long-term problems B long-term problems; short-term problems C long-term problems; long-term problems D short-term problems; short-term problems
What were John Maynard Keynes views of the causes of recessions and solutions to fixing them?
An economic theory regarding the effect of an economic variable on another when all other factors stay constant is called _____. laissez faire Keynesian e pluribus unum Ceteris Paribus
Is it a logical contradiction to be a neoclassical Keynesian? Explain.
According to macroeconomic theory, a concurrent increase in AD and decrease in AS will cause __________. Group of answer choices deflation economic recession economic boom inflation
Which one of the following statements is true? In the pre-Keynesian era, prices were assumed not to fully adjust. In the Keynesian model diagram, prices are fixed. GDP is a value of goods and services domestically produced in a country at a given point in time. Say's Law says that demand creates its own production. In the IS/LM model, the interest rate is a function of investment.