Because, government intervention is must to increase the private investments and hence to increase the aggregate demand of the people.
According to classical, a economy persists at full employment level and at equilibrium. Also, supply creates ita own demand.
But this concept got criticized by the keynes,
According to keynes some government intervention is must for economy as the government intervention means expenditure done by governamt in economy and this leads to increase in private investment and hence, GDP will rise as due to rise in AD.
So, GDP fluctuations between recession and expansion needs government intervention.
(B) If real GDP is always fluctuating between recessions and expansions why would the government enact...
(B) If real GDP is always fluctuating between recessions and expansions why would the government enact policies to influence an economy out of a recession instead of letting the economy adjust on its own over time?
me U.S. real net exports are typically A. negative, and usually fall in recessions and rise in expansions. ts B. positive, and usually rise in recessions and fall in expansions. O C. positive, and usually fall in recessions and rise in expansions. OD. negative, and usually rise in recessions and fall in expansions. Tevt Why did US net exports increase during the 2007-2009 recession? A. China, the major trading partner of the US, suffered a more severe recession than the...
(1) Playing with data: Download quarterly, seasonally adjusted data on US real GDP, personal consumption expenditures, and gross private domestic investment for the period 1947q1 - 2010q2. You can download these series from the Bureau of Economic Analysis (BEA) or the St. Louis Fed FRED database. (a) Take the natural logarithm of each series (ì=ln(series)î in Excel) and plot each against time. Which series appears to move around the most? Which series appears to move around the least? (b) The...
1. Year Nominal GDP GDP Price deflator Real GDP Inflation Rate Growth Rate 2008 $14,833.60 99.23 -- -- 2009 14,417.90 100.00 2010 14,779.40 101.21 2011 15,052.40 103.20 2012 15,470.70 105.00 2013 15,759.00 106.59 2014 17,420.70 108.27 2015 18,287.20 110.01 2016 18,905.50 112.08 2017 19,738.90 114.27 a. Fill in the blanks in the table above and show your work. b. Over this time period, does inflation...
The graph below shows real GDP levels over time. Answer the following questions based on this graph. Business Cycle Real GDP Time a. At time T, what is the economy experiencing? Full-employment output An economic contraction An economic expansion b. In order to smooth out the business cycle, what type of fiscal policy should the government undertake? Contractionary fiscal policy Expansionary fiscal policy c. What type of actions might the government take? An increase in both taxes and government purchases...
Incorrect Question 11 0/2 pts When you look at countries that have high levels of GDP and compare them to countries with very low levels of GDP, what, according to our text, can you say about the relationship between GDP and leisure time? There is a positive relationship between a country's GDP and the average amount of leisure time enjoyed by its citizens (the higher GDP, the more leisure time on average) There is no direct relationship between a country's...
1. If real GDP equals nominal GDP, then: A. the growth in output was greater than the growth in the price level. B. there was no inflation. C. the current year is the base year. D. output did not grow. E. the growth in output was equal to the growth in the price level. 2. Nominal GDP is GDP measured in: A.base prices. B.fixed prices. C. current prices. D. marginal prices. E. average prices. 3. When you include discouraged workers...
Canada's Economy Surges 4.5 Percent Canadian real GDP unexpectedly accelerated to a 4.5 percent pace in the second quarter of 2017. This faster than expected growth was the fastest among Group of Seven countries. It was led by the biggest rise in household spending since before the 2008-2009 global recession Source: Bloomberg, August 31, 201 How would an unexpected increase in the economic growth rate influence federal government outlays? Federal government outlays would because A decrease, government expenditure on goods...
The graph below shows real GDP levels over time. Answer the following questions based on this graph Business Cycle Real GDP a. At time T. what is the economy experiencing? Full employment output An economic expansion - An economic contraction a. At time t, what is the economy experiencing? O Full-employment output O An economic expansion O An economic contraction b. In order to smooth out the business cycle, what type of fiscal policy should the government undertake? O Contractionary...
The graph below shows real GDP levels over time. Answer the following questions based on this graph. Business Cycle Real GDP Time a. At time T, what is the economy experiencing? An economic contraction Full-employment output An economic expansion b. In order to smooth out the business cycle, what type of fiscal policy should the government undertake? Expansionary fiscal policy Contractionary fiscal policy c. What type of actions might the government take? An Increase in taxes and a decrease in...