BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

Solutions

Chapter
Section
BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

According to Keynes, can the private sector always remove the economy from a recessionary gap? Explain your answer.

To determine

Recessionary gap and the private sector.

Explanation

According to the classical economists, the economy is always self regulating and does not need any intervention of the government to control its activities other than providing the military support. Thus, they demanded the Laissez Faire economy where the economic transactions of the economy are free from the government regulations, tariffs, and interventions. Thus, the Classical economists always believed that the private sector can always move out the economy from the recessionary gap and bring about the equilibrium.

However, according to the Keynesian economists, the laissez Faire economy fails to self regulate when there is only private sector because under the recession period, the people will reduce their consumption and this will lead to very lower levels of the aggregate demand in the economy...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is inflation and what causes it?

Principles of Microeconomics (MindTap Course List)

What is the relationship between supply and demand?

Foundations of Business (MindTap Course List)

What is the transfer pricing problem?

Cornerstones of Cost Management (Cornerstones Series)

SPOT AND FORWARD RATES Anderson Australian Imports has agreed to purchase 15,000 cases of Australian wine for 4...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is the purpose of endorsing a check?

College Accounting (Book Only): A Career Approach