ession, a Keynesian economist would: (Select all that apply) A. Increase Taxes B. Decrease Taxes C. Increase Government Spending D. Decrease Gover
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- Question 1. Use the Keynesian cross to predict the impact on equilibrium GDP of a. An increase in government spending b. An increase in taxes c. An equal increase in both government spending and taxes16. To be a Keynesian means that you believe in two principles. What are those two principles? a. b.Suppose most business executives expect a slowdown in the economy. How might this situation affect the economy? Give at least 2 suggestions.
- In the Keynesian Cross model, if government spending is raised by $100 million, income must a. rise by more than $100 million. b. rise by $100 million. c. rise by less than $100 million. d. rise, but it is not clear how muchWhat is Keynes; law?1. Explain the difference between Keynesian economics and Classical economics by mentioning the complete name of the economist who develops the theory/model. 2. Describe each of the components of the GNP equation and which one you feel can distort GNP the most.
- Use the keynesian cross to predict the impact of:A.an increase in government purchase. B.an increase in taxes. C.an equal increase in government purchase and taxes. Urgent.Defend or Refute. “John Maynard Keynes rejected the theory of classical economics that there will be an automatic adjustment in the economy when there is a deviation in the economy from full- employment. Keynes added that the government should intervene in the economy by spending more to induce the income and spending of the people”. Explain your position.Which of the following is not a valid point in debating the merits of increasing government expenditures or cutting taxes during a recession? a. A cut in the marginal tax rate increases the incentives to find a job and work longer hours. b. Consumers will save a portion of a tax cut. c. The government may use the increase in expenditures on projects with little value, particularly, if it wishes to respond quickly. d. There is no evidence that tax cuts have been followed by increases in economic growth.
- If the economy is in a recessionary period how, specifically, might the government use their three tools?In Keynesian 45 degree diagram, at the intersecting point between the line representing and the line representing and total spending of are exactly equal to national income or real GDP. This means that the amount that is bought is exactly equal to the amount that is actually produced. This is the level of output in this model, shown as Ye. What happens when real GDP produced is less than Ye? If the amount consumers, firms, government and foreign countries want to buy is than the quantity of real GDP, then there is insufficient output to satisfy total expenditure. On the other hand, if real GDP is greater than Ye, the amount that consumers and firms want is bought is than real GDP produced. Too many goods and services are being produced relative to total expenditure. With too much spending relative to output produced, firms' inventories are sold, thus providing firms with the signal to production, causing real GDP to to Ye. With too little spending relative to what is produced, firms…The multiplier effect represents Keynes’s insight that:(a) households would rather spend than save.(b) businesses prefer to be in the expansion phase of the business cycle.(c) an increase in spending will increase equilibrium income by more than the initial increase in spending.(d) an increase in equilibrium income will increase the marginal propensity to consume.