Describe the policy change that a classical macroeconomists, a Keynesian, and a monetarist would recommend for...

Describe the policy change that a classical macroeconomists, a Keynesian, and a monetarist would recommend for policymakers in a European country to adopt in response to each of the following events:

1-Inflation is rising quickly.

2-Growth in the world economy accelerates.

3-The world price of oil falls.

Solutions

Expert Solution

In this question, there is the policy change according to a different category of the economic thought that is under a classical macroeconomist, Keynesian and monetarist recommendations for policymakers in a European country to adopt in response to each of the following events.

1- inflation is rising quickly.

If the inflationary situation is rising quickly in the economy then under a classical microeconomist it would control the strategic long-run economic policies to control the inflationary situation by observing the factors to make the economic policies according to the situation.

A Keynesian economist believes in the control of aggregate demand and aggregate supply if the inflation is rising quickly in the economy.

Monetarist economists work on the policy-making of inflation where they can control the money supply in the matter of the control of the inflationary and deflationary situation in the economy.

2- growth in the world economy accelerates.

. in this case, a macroeconomist work on the concept of gross domestic product which controls the efficiency and effectiveness in the economy the Keynesian economics work on the concept of the control of aggregate demand and aggregate supply in the inflationary and deflationary situation in the economy and it is related to the growth of world economy with the context of domestic economy and a monetarist means who can control the total money supply and enhance the money supply in the world economy.

3. The world price of oil falls in this concept macroeconomists work on the analysis of rising and fall of the GDP. The Keynesian economist controls the overall demand and overall supply in the economy and the Monitor test can control by reducing the prices up to the optimum level.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

a. Specifically address the different policy recommendations specifically between the Keynesian and Monetarist/classical school for getting...

a. Specifically address the different policy recommendations specifically between the Keynesian and Monetarist/classical school for getting the economy out of the recession. b. What about the rational expectations schooladjustment process? What are some of the key assumptions of the rational expectations with regards to the business cycle and the flexibility of prices and wages?

Specifically address the different policy recommendations specifically between the Keynesian and Monetarist/classical school for getting the...

Specifically address the different policy recommendations specifically between the Keynesian and Monetarist/classical school for getting the economy out of the recession. What about the rational expectations school adjustment process? What are some of the key assumptions of the rational expectations with regards to the business cycle and the flexibility of prices and wages?

The key difference between classical and Keynesian macroeconomists is their differing beliefs about

The key difference between classical and Keynesian macroeconomists is their differing beliefs aboutA. The speed at which prices adjustB. The full employment level of outputC. The natural rate of unemploymentD. The slope of the aggregate demand curve

Regarding the classical, Keynesian, monetarist, and new classical (DSGE) theories, explain the historical context in which...

Regarding the classical, Keynesian, monetarist, and new classical (DSGE) theories, explain the historical context in which each was developed and rose to prominence within economics. Discuss the key assumptions of each theory and explain the resulting policy implications.

The differences between Classical, Keynesian, Monetarist, and how each of the school of thought stands for...

The differences between Classical, Keynesian, Monetarist, and how each of the school of thought stands for with regard to economic policies; Their differences in their view with regards to: wages and prices, AS curve, Monetary policy or Fiscal policy.

1) Why would a Keynesian monetarist use a contractionary monetary policy? What goals are they trying...

1) Why would a Keynesian monetarist use a contractionary monetary policy? What goals are they trying to achieve and why? (3 points) 2) In the neoclassical money market (interest rates on the vertical axis) what does AS represent? (2 points) 3) In the neoclassical money market, how can AS shift to the right without shifting AD? How could this be accomplished? Why would the outcome of growth with lower interest rates be desired? (5 points) 4) Why are nominal interest...

A. Compare monetarist and Keynesian views on the proper conduct of fiscal policy.

A. Compare monetarist and Keynesian views on the proper conduct of fiscal policy. For bothmonetarists and Keynesians, explain not only their conclusions concerning fiscal policy butalso how those conclusions are related to their respective theories.B. Compare monetarist and modern Keynesian views on the proper conduct of monetary policy.For both monetarists and Keynesians, explain not only their conclusions concerningmonetary policy but also how those conclusions are related to their respective theories.C. Beginning in the late 1960s, the number of entrants to...

What are the differences and similarities among the New Keynesian, Monetarist and Neo-Classical models in terms...

What are the differences and similarities among the New Keynesian, Monetarist and Neo-Classical models in terms of their predicted outcomes? How do the different assumptions of the models result in policy debates among their respective adherents?

Briefly talk about the differences between monetarist monetary policy and Keynesian monetary policy.

Subjects