Question

need help answering these homework questions please

Many nations around the world have "privatized" their formerly government-run social security systems such as Canada, Chile, Denmark, Sweden, etc... and they now have plenty of cash reserves for the future. Conclusion: A typical university academic professor who is a devout Keynesian economist would also support the idea of privatizing a government run social security system. True or False True False

Answer 1

1) This statement is FALSE. A devout Keynesian economist would oppose the privatization. According to the Keynes school of thought, government spending through government institutions is the main tool available to come out of a recession. Keynesians propagate increasing government spending to weather the slump. Thus, a devout Keynesian would never vouch for privatization of social security.

2) This statement is FALSE. Austrian school of economic thought believes taxes to be involuntary. They believe that taxes are an invasion into the market. Thus, they cannot be in support of higher taxes.

3) Consumer Spending + Investment Spending + Government Spending +/- (Imports - Exports) = Keynesian Aggregate Supply, which measures GDP and GO

According to Keynesian economists, altering any of the elements in this equation, leads to changes in GDP.

4) The Federal Reserve is involved in all the activities listed here. These activities are not necessarily listed in popular literature.

5) This statement is TRUE. Supply side economists would always agree that raising taxes will be a disaster. This is because increase in taxes directly reduce the supply of goods and services and thus backfires.