1) If the economy is in a recession and the president invites three economists—A Keynesian, a...

1) If the economy is in a recession and the president invites three economists—A Keynesian, a monetarist, and a new classical—to offer explanation and policy options, what would each say in two sentences or less?

-Keynesian:

-Monetarist:

-NeoClassical:

2) Between the crises of 1930s and 2008, what are (mention two for each):

a) the similarities?

b) the differences?

3) If you were an influential economist, to prevent deep recessions in the future, what policies/thoughts would you offer?

Expert Solution

Answer1- Keynesian:During a recession Keynessian economist would suggest government intervention to stabilise the economy. Government should increase expenditure in order to boost aggregate demand in the economy. Government should formulate employment generating policies to create employment and thereby increase income, aggregate demand and ultimately production in the economy will increase.

Monetarist: Monetarist would oppose the role of fiscal policy but stress on the role of monetary policy to stabilise the economy during recession. According to them, as money supply increases, people demand more, production increases and more jobs are created.

NeoClassical- The neo-classicist believed that a recession will correct itself through the forces of demand and supply. They believed that prices and wage rates are flexible and will adjust either upward or downward to restore the economy during depression or recession to its potential level of GDP.

Rahul Sunny answered 7 months ago

Keynesian economists focus on the short run business cycle-are we going into another recession or not?...

Keynesian economists focus on the short run business cycle-are we going into another recession or not? If unemploymnet increases then federal unemployment benefits are paid out. Classical economists focus on what the economic growth rate will be for the next 10 or 20 years. Are there enough incentives built into the economy to promote technological innovation and new business? Environmentalists worry that the focus on growth-whether short term or long term increases environmental damage and climate change. Which group would...

1- Economists argue that Palestinian economy is going into Depression others argue its still in recession...

1- Economists argue that Palestinian economy is going into Depression others argue its still in recession …what do you think ? why? 2- Many Palestinian people Claim Corona is not existing , and refuse to accept the idea its dangerous , although all the efforts , programs , awareness campaign s Palestinian government apply , from the presentations you attended about Nudge Book , how do you think Palestinian government must behave toward this Issue ?

Assume you are an economic advisor for the President. The economy is in a recession, similar...

Assume you are an economic advisor for the President. The economy is in a recession, similar in magnitude to the Great Recession of 2007. The President wants to cut income taxes. An article published in an economics journal found the following: “For the poorest households, the marginal propensity to consume was close to 70%. For the richest households, the MPC was only 35%.” (Atif Mian and Amir Sufi, “Who Spends Extra Cash?” House of Debt, April 13, 2014). Based upon...

(b). Suppose an economy is in recession with historically high unemployment . Using the Keynesian income-expenditure...

(b). Suppose an economy is in recession with historically high unemployment . Using the Keynesian income-expenditure model, explain how an expansionary fiscal policy, involving a reduction in the marginal tax rate can reduce the unemployment rate. What does your explanation suggest about using the overall budget balance as an indicator of the stance of fiscal policy?

Economists argue that Palestinian economy is going into Depression others argue its still in recession …what...

Economists argue that Palestinian economy is going into Depression others argue its still in recession …what do you think ? why?

what are three conjectures of keynesian consumption function? why economists worry about consumption functions? is it...

what are three conjectures of keynesian consumption function? why economists worry about consumption functions? is it autonomous or disposable income that matters for economy?

1-) Who were the major proponents of Keynesian Theory? Touch on both the economists and political...

1-) Who were the major proponents of Keynesian Theory? Touch on both the economists and political figures that promoted the theory. (Write two paragraphs) 2-) Was the theory successful at the time? (Write two paragraphs) 3-) Is it still successful today? Why or why not? (Write two paragraphs)

1. How are the Keynesian and neoclassical perspectives on the economy different, and how is it...

1. How are the Keynesian and neoclassical perspectives on the economy different, and how is it possible for one economist to accept both of these perspectives? 2. Explain why there is an expenditure multiplier and why it is expected to be different for government spending and taxation.

4. Assume there are three possible future states for the economy (Boom, Stagnant, and Recession) with...

4. Assume there are three possible future states for the economy (Boom, Stagnant, and Recession) with associated probabilities of 20%, 45%, nd 35%. For each future stae of the economy, a security pays either $40.00 or $20.00 with equal probability (i.e., a 50% chance of either payoff occuring). a. What is the expected future cash flow for any given future state of the economy? b. What is the expected future cash flow for the security? c. Further assuming the future...

Suppose an economy has three states: boom, normal, and recession. Assume that the probability of a...

Suppose an economy has three states: boom, normal, and recession. Assume that the probability of a boom state is 0.2, a normal state is 0.5, and a recession state is 0.3. And there are three stocks in this economy, called Alpha, Beta, and Gamma respectively. The return performance of these stocks has been summarized by the following table: Alpha Beta Gamma boom 15% 28% 1% normal 6% 12% 3% recession -12% -30% 20% (Please show your intermediate processes, instead of...

Question