Chapter 11: 18 (page 291)
Do neoclassical economists believe in Keynes’ law or Say’s law?
Short Answer
Neo-classical economists believed in Say's law.
Chapter 11: 18 (page 291)
Do neoclassical economists believe in Keynes’ law or Say’s law?
Neo-classical economists believed in Say's law.
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Get started for freeIf foreign wealth-holders decide that the United States is the safest place to invest their savings, what would the effect be on the economy here? Show graphically using the AD/AS model.
Suppose the level of structural unemployment increases. How would you illustrate the increase in structural unemployment in the AD/AS model? Hint: How does structural unemployment affect potential GDP?
Would a shift of AD to the right tend to make the equilibrium quantity and price level higher or lower? What about a shift of AD to the left?
Briefly explain the reason for the near-horizontal shape of the SRAS curve on its far left.
In your view, is the economy currently operating in the Keynesian, intermediate or neoclassical portion of the economy’s aggregate supply curve?
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