Macroeconomics: Private and Public Choice
15th Edition
ISBN: 9781285453545
Author: Russell Sobel; Richard Stroup; James Gwartney; David Macpherson
Publisher: South-Western College Pub
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Chapter 14, Problem 12CQ
To determine
Identify the major cause of the business cycle.
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Who is John Maynard Keynes? What time period did he write? What did he believe about the market’s ability to recover from a recession?
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Chapter 14 Solutions
Macroeconomics: Private and Public Choice
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- What is Global Keynesianism?arrow_forwardJohn Maynard Keynes spearheaded a new school of macroeconomic theory during the Great Depression. Which of the following represents a Keynesian point of view of macroeconomics?arrow_forwardWhy do economists and managers pay attention to the measurements of macroeconomic activity?arrow_forward
- What was Keynes’s solution to the Depression?arrow_forwardAccording to Keynesian business cycle theory, what should the government do in response to a recession?arrow_forwardAccording to the classical perspective (the one from the 19th century that I described at the beginning of my first lecture video), what kinds of things could cause recessions or other economic downturns?arrow_forward
- when hoarding occurs, what problem does it create for an economy? You can use the recent run on grocery stores for food, toilet paper, and cleaning products as an example. Do you feel the government should step in to prevent these types of situations? Why or why not? What types of policies do you think could prevent or help with this type of event? in terms of macro economics.arrow_forwardQuestion 5. What is the name of Keynesian book published in 1936?arrow_forwarddescribing the economic viewpoints and theories of John Maynard Keynes. What were his views of the causes recessions and solutions to fixing them?arrow_forward
- Suppose you are an advisor to the Business Cycle Dating Committee. You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year. Which data do you look at? How does the economy behave at the onset of a recession? Explain how unemployment changes over the business cycle. Why do these changes occur?arrow_forwardFill in the blank. ALEX: Hi, Becky. I’m intrigued to see how macroeconomics allows us to explain recent economic events such as the Great Recession that affected so many people. But there’s one thing I don’t understand. Was the collapse of the housing bubble the only cause of the recession, or were there other factors as well? BECKY: Hi, Alex. I agree that macroeconomic theory offers an entirely new perspective on how the economy works. To answer your question, the crash of the housing market was a major factor but not the only cause of the Great Recession. The professor mentioned that the __________ (options: financial, fiscal, government) system deteriorated as well, an event that deepened the economic downturn even further. ALEX: I see. So the bursting of the housing bubble caused the initial decline in aggregate demand. Then the financial crisis caused aggregate demand to decline even more. Could you also help me understand how to use the aggregate demand and aggregate supply model…arrow_forwardWhich of the following is a Keynesian approach for dealing with a recession? a) Raise interest rates.b) Increase government expenditure.c) Raise tax rates.d) increase supply incentives for producersarrow_forward
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