Chapter 12: Q.6 (page 312)
Does Keynesian economics require government to set controls on prices, wages, or interest rates?
Short Answer
The government is not required by Keynesian economics to set price, wage, or interest rate controls.
Chapter 12: Q.6 (page 312)
Does Keynesian economics require government to set controls on prices, wages, or interest rates?
The government is not required by Keynesian economics to set price, wage, or interest rate controls.
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Get started for freeIn a Keynesian framework, using an AD/AS diagram, which of the following government policy choices offer a possible solution to recession? Which offer a possible solution to inflation?
a. A tax increase on consumer income.
b. A surge in military spending.
c. A reduction in taxes for businesses that increase investment.
d. A major increase in what the U.S. government spends on healthcare.
What tradeoff does a Phillips curve show?
What is the Keynesian prescription for recession? For inflation?
Suppose the economy is operating at potential GDP when it experiences an increase in export demand. How might the economy increase the production of exports to meet this demand, given that the economy is already at full employment?
From a Keynesian point of view, which is more likely to cause a recession: aggregate demand or aggregate supply, and why?
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