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What are the determinants of induced consumption in Keynesian model of a closed economy with a government sector?
Wiki User
∙ 12y ago
Income and taxes
Wiki User
∙ 12y ago
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What can be done to increase consumption in a depressed economy?
Keynesian economics might be successful as it was in the 1960's depression. It is basically the government going into debt then pumping more money into the economy.
What does the Keynesian economic theory suggest?
That the government oversee and regulate the balance of the economy.
Does capitalism advocate government action to stop boom and bust cycles in the economy?
No capitalism does not advocate government action to stop boom and bust cycles in the the economy. The economic theory of Keynesian is usually what advocates it.
Differentiate between New Classical and New Keynesian economics school of thoughts?
the classical believe the economy is best left to itself whereas the keynesian argued that government intervention could improve economic performance
Which of these statements is fundamental part of keynesian economics?
The government can use deficit spending to increase aggregate demand and pull the economy out of recession.
What can be done to increase consumption in a depressed economy?
Keynesian economics might be successful as it was in the 1960's depression. It is basically the government going into debt then pumping more money into the economy.
What does the Keynesian economic theory suggest?
That the government oversee and regulate the balance of the economy.
Does capitalism advocate government action to stop boom and bust cycles in the economy?
No capitalism does not advocate government action to stop boom and bust cycles in the the economy. The economic theory of Keynesian is usually what advocates it.
Differentiate between New Classical and New Keynesian economics school of thoughts?
the classical believe the economy is best left to itself whereas the keynesian argued that government intervention could improve economic performance
Which of these statements is fundamental part of keynesian economics?
The government can use deficit spending to increase aggregate demand and pull the economy out of recession.
What statements is a fundamental part of Keynesian economics?
The government can use deficit spending to increase aggregate demand and pull the economy out of recession.
What does Keynesian revolution mean?
Keynesian is an economics term that refers to advocated government monetary and fiscal programs intended to stimulate business activity and increase employment.
In contrast with classical economics keynesian economics does what?
In contrast with Classical economics, Keynesian economics takes a broader view of the economy
What is the different between classic and keynesian macroeconomics?
Classical Theory: Government has minimal role in the economy, and the macro-economy is self adjusting; meaning consumers and businesses will correct any problems with the economy automatically over time. Classical theory focuses on long-term goals. Keynesian Theory: Government has a large role in the economy, and focuses on short-term goals. Used mostly in times of recession, government spending is a good way to put money back into the GDP and in turn increase unemployment.
Do Keynesian economist believe that the economy is self regulating?
No, they regulate the economy by doing 2 things: 1)increasing government spending and decrease taxes to fight recession 2) decrease government spending and increase taxes to fight inflation.
What actions would a modern Keynesian economist advocate to cure a recessionary gap?
a Keynesian would argue that the essence to solve recession lies with demand management. When an economy is experiencing a boom (inflationary gap), government should tax people, reduce spending ...etc... to soak up the demand. When an economy is experiencing a bust (recessionary gap), government should decrease tax and increase government spending (using money they gained during the boom) to increase the demand of an economy.
The way the government uses taxes and spending to stabilize the economy is called what?
Fiscal policy is the way the government uses taxes and spending to stabilize the economy. It is based on the theories of British economist John Maynard Keynes, also known as Keynesian economics.
