1.From a neoclassical viewpoint, government should focus less on long-term growth. flexible prices. government stimulus spending.
Homework Answers
Ans) the correct option is government stimulus spending.
From a neoclassical viewpoint, government should focus less on government stimulus spending and cyclical unemployment
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1.From a neoclassical viewpoint, government should focus less
on
long-term growth.
flexible prices.
government stimulus spending.
What is the spending multiplier if the MPC is 62%? 1.61 .62 2.63 Unlike the neoclassical...
What is the spending multiplier if the MPC is 62%? 1.61 .62 2.63 Unlike the neoclassical approach to the economy, the Keynesian approach focuses on sticky prices and aggregate demand. This focus is advantageous for understanding the reason cyclical unemployment and recessions occur, as these fluctuations take place in the ________ -run. long gap short What is true about the expenditure multiplier? GDP does not change proportionally. GDP changes when the aggregate expenditure changes. A larger change in expenditure causes...
Question 1 (1 point) The neoclassical view holds that long-term expansion of potential GDP due to...
The neoclassical view holds that long-term expansion of potential GDP due to _______ will determine _______ . economic growth; the size of the economy government spending; aggregate demand government spending: aggregate supply economic adjustments; cyclical unemployment If the neoclassical argument that the economy always moves back to potential GDP is accepted, then which of the following will be more important? encouraging higher wages fighting unemployment fighting recession encouraging long-term growth
A weakness of the neoclassical economic view is that it: can overlook the long-term causes of...
A weakness of the neoclassical economic view is that it: can overlook the long-term causes of economic growth like the existing natural rate of unemployment even when the economy is at potential GDP. focuses on the long-term factors for economic growth and not the short-term causes of economic growth such as why unemployment fluctuates up and down over a few years. can overlook the efficiency of the market economy in self-correcting in the long-run. Keynes' Law says that demand creates...
Do you think our government should focus on the long run or the short run? Why...
Do you think our government should focus on the long run or the short run? Why do you feel that way? How do you think policies would change if the government focused only on the long run? Attachments Skills Explain macroeconomic perspectives on demand and supply. Explain how the aggregate demand/aggregate supply model incorporates growth, unemployment, and inflation. Compare and contrast neoclassical and Keynesian views using the aggregate demand/aggregate supply model to understand the economy.
14. Which of the following statements would be inconsistent with Say’s law? A given value of...
14. Which of the following statements would be inconsistent with Say’s law? A given value of supply must create an equivalent value of demand in the economy. The economy has flexible prices and wages. The best way to foster an economy is through government stimulus spending. 15. What is one of the cornerstones on which neoclassical economics is built? Aggregate demand determines the size of the economy. Prices and wages lend themselves to stickiness. Unemployment is mostly cyclical. Prices and...
Of the following government policies, which would be considered a neoclassical response to an economic recession?...
Of the following government policies, which would be considered a neoclassical response to an economic recession? an increase in government spending adjusting the minimum wage higher dissolving labor unions If you are explaining the theory of rational expectations to a friend, you would say that the change in an agents’ expectations is ________ and therefore ________ the effectiveness of monetary or fiscal policy. based on historic information; always improves immediate; precludes slow; increases If a government expands its fiscal policy...
1. During the Great Recession, the government stimulus spending included the provision of extending unemployment insurance...
1. During the Great Recession, the government stimulus spending included the provision of extending unemployment insurance benet. What would be the possible effect on economic growth predicted by static scoring? How about by dynamic scoring? Explain.
According to neoclassical theory, changes in GDP, or the vertical AS curve, will be caused by...
According to neoclassical theory, changes in GDP, or the vertical AS curve, will be caused by potential output changes. cyclical unemployment. aggregate demand changes. The owner of a national construction company has been watching current economic changes. They have gathered historical data from their company’s business experiences through up and down markets and have decided on a plan to follow as demand changes over the next year, three years and five year plan, with alternative options based on past data....
Consider the neoclassical zone in the graph above. Which of the following is a true statement...
Consider the neoclassical zone in the graph above. Which of the
following is a true statement about Say’s Law in the neoclassical
zone?
Shifts of the AD curve have little to no effect on supply
output because the LRAS at full output is creating demand.
Because equilibrium is close to or at potential GDP,
unemployment is affected by shifts in the AD curve.
Movement of the AD curve to the right or to the left shifts the
LRAS curve.
What...
5. Government Spending and Long Run Economic Performance Consider the following variant of the basic growth...
5. Government Spending and Long Run Economic Performance Consider the following variant of the basic growth model: We will include a government that consumes output (G) and pays for it by imposing lump sum taxes (T). The government balances its budget every period. With these modifications the model becomes: Y = A-. K.N.- N =1 Y = C, +1, +G I, =s.(Y, -T) T, = G, K,+1=K,:(1-5)+1, Suppose government spending is proportional to output. As the country grows, the government...
Consider the neoclassical zone in the graph above. Which of the
following is a true statement about Say’s Law in the neoclassical
zone?
Shifts of the AD curve have little to no effect on supply
output because the LRAS at full output is creating demand.
Because equilibrium is close to or at potential GDP,
unemployment is affected by shifts in the AD curve.
Movement of the AD curve to the right or to the left shifts the
LRAS curve.
What...
5. Government Spending and Long Run Economic Performance Consider the following variant of the basic growth model: We will include a government that consumes output (G) and pays for it by imposing lump sum taxes (T). The government balances its budget every period. With these modifications the model becomes: Y = A-. K.N.- N =1 Y = C, +1, +G I, =s.(Y, -T) T, = G, K,+1=K,:(1-5)+1, Suppose government spending is proportional to output. As the country grows, the government...
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