Keynesian view on savings.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Based on what you know about events in Europe after World War I, why does Keynes say the social and industrial changes on the European continent are “of a different kind altogether” from those in England? Explain.

Keynes advocated the use of fiscal and monetary policy to stabilize an economy? When are the effects of these policies most beneficial? Select all that apply. Select one or more: In the short run When the economy is operating at full employment When the economy is operating significantly above full employment When the economy is operating significantly below full employment In the long run

According to Keynes(Keynesian Macroeconomics), can the private sector always remove the economy from a recessionary gap? What would be the solution from a Christian perspective regarding people who cannot afford medical care?

Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Answer 6

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Answer 7

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Answer 8

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.