Question

Which of the following would shift the demand curve for cars to the right?

Group of answer choices

An increase in the federal funds rate

An increase in discount lending by the Fed to banks

An increase in home mortgage interest rates

An increase in the unemployment rate over the NAIRU

originally proposed the use of government spending to stimulate the economy in the 1930s, during the Great Depression.

Group of answer choices

John Maynard Keynes

Franklin Delano Roosevelt

Albert Einstein

Charles H. Chaplin

Answer 1

Answer 1

( b ) part is a correct answer, increase in discount lending by fed to banks can lead to the increase the demand of the cars . As fed increase the discount lending to banks , bank will offer lower interest rate in the market . Lower interest rate will initiate the borrowers to buy the cars for which they can easily take a loan and have to pay the lower interest rate . Hence demand curve can shift to the right . Rest all options lead to decrease the purchasing power of the buyers of the car and will not motivate them to buy the cars

Answer 2

( a ) part is a correct answer .Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. The government cut welfare spending and raised taxes to balance the national books. Keynes said this would not encourage people to spend their money, thereby leaving the economy unstimulated and unable to recover and return to a successful state. Instead, he proposed that the government spend more money, which would increase consumer demand in the economy. This would, in turn, lead to an increase in overall economic activity, the natural result of which would be recovery and a reduction in unemployment.