Question

Please do it by type not pics.

1.The Great Recession (2007 to 2009) changed the nature and direction of the macroeconomic debate because:

a.the financial crisis threatened to collapse the entire economy, an outcome not predicted by classical models.

b.the prior direction of the macroeconomic debate was on the New Classical and Real Business Cycle models.

c.the technology boom of the 1990s seemed to validate the Real Business Cycle model.

d.of all of the answers in this question.

e.the recession seemed to resemble an old-fashion Keynesian demand shock.

2.In the Keynesian model, the fallacy of composition suggests that behavior at the micro level does not necessarily hold at the macro level because:

a.of all of the answers in this question.

b.price adjustment in the Keynesian model is slow due to sticky prices and wages.

c.belt tightening by individuals in the macro economy may cause GDP declines if the saved money is not loaned out in a weak economy.

d.one person's spending is another person's income and linked together at the macro level.

e.while the classical model assumes that all savings is loaned out and becomes investment, the Keynesian model allows for savings to remain idle.

3.Regardless of the starting point in modern macroeconomic models, through the adjustment process the economy will ultimately:

a.will always be below potential GDP.

b.will ultimately return to potential GDP.

c.remain in its current point either above, below, or at potential GDP.

d.will eventually exceed potential GDP.

Answer 1

1. The Great Recession (2007 to 2009) altered the nature and course of the macroeconomic civil argument in light of the fact that: the money related emergency debilitated to crumple the whole economy, a result not anticipated by traditional models and the earlier heading of the macroeconomic open deliberation was on the New Classical and Real Business Cycle models. Accordingly, worldwide GDP declined by 2 percent in 2009.

2. 2.In the Keynesian model, the false notion of sythesis recommends that conduct at the smaller scale level does not really hold at the full scale level since: belt fixing by people in the large scale economy may cause GDP decreases if the spared cash isn't lent out in a feeble economy. In financial aspects, the paradox of organization goes up against an uncommon importance. The false notion happens financial specialist regards the economy as though it were a family or business. This prompts the supposition that an approach that will work for a business will work for the economy all in all. At the point when a market analyst accept that what is useful for a family is useful for the economy, they paradox of sythesis has happened.

3. Notwithstanding the beginning stage in present day macroeconomic models, through the alteration procedure the economy will at last: will eventually come back to potential GDP.