On the Government Spending Multiplier
... There has been much recent attention given to the concept of the government spending multiplier. In this document I discuss what the multiplier is, how it is derived, and when it might be large. In the model with which we have worked so far, output is exogenously given. That is, y s = y fixed. The t ...
... There has been much recent attention given to the concept of the government spending multiplier. In this document I discuss what the multiplier is, how it is derived, and when it might be large. In the model with which we have worked so far, output is exogenously given. That is, y s = y fixed. The t ...
Fiscal and Monetary Policy
... government bonds, lowering the interest rate, or lowering the reserve ratio. Thus, the money supply will increase in the economy, unemployment will decrease, and borrowing and spending will be stimulated. In developed countries, governments may want to decrease the money supply by using contractiona ...
... government bonds, lowering the interest rate, or lowering the reserve ratio. Thus, the money supply will increase in the economy, unemployment will decrease, and borrowing and spending will be stimulated. In developed countries, governments may want to decrease the money supply by using contractiona ...
Problem Set 3
... 9 - ) The term fiscal drag refers to: a. The time it takes for the government to discover a problem in the economy, determine the correct action, and implement policies to deal with it b. The drag of budget deficits on the economy c. The impact of taxes on the economy, which may put a drag on an eco ...
... 9 - ) The term fiscal drag refers to: a. The time it takes for the government to discover a problem in the economy, determine the correct action, and implement policies to deal with it b. The drag of budget deficits on the economy c. The impact of taxes on the economy, which may put a drag on an eco ...
appendix to chapter 26
... The Keynesian activist approach rejects classical nonintervention policy to stabilize the economy using discretionary fiscal policy or activist monetary policy. Exhibit A-1 illustrates opposing theories for restoring an economy in recession to full employment. In both parts (a) and (b), the economy ...
... The Keynesian activist approach rejects classical nonintervention policy to stabilize the economy using discretionary fiscal policy or activist monetary policy. Exhibit A-1 illustrates opposing theories for restoring an economy in recession to full employment. In both parts (a) and (b), the economy ...
Spring 1997 Midterm #2
... a) Classical economists thought that aggregate demand is perfectly inelastic. b) Keynesian economists thought that wages are rigid. c) Classical economists thought that output tends to be at the full employment level. d) Keynesian economists thought that prices are not flexible in short-run. e) Keyn ...
... a) Classical economists thought that aggregate demand is perfectly inelastic. b) Keynesian economists thought that wages are rigid. c) Classical economists thought that output tends to be at the full employment level. d) Keynesian economists thought that prices are not flexible in short-run. e) Keyn ...
NBER WORKING PAPER SERIES
... The presumption that higher government wartime spending expanded aggregate demand, and brought the U.S. economy out of the Depression, set the stage for increasing economists’ confidence in the Keynesian model. And data from the 1950s and 1960s further solidified the apparent empirical support for t ...
... The presumption that higher government wartime spending expanded aggregate demand, and brought the U.S. economy out of the Depression, set the stage for increasing economists’ confidence in the Keynesian model. And data from the 1950s and 1960s further solidified the apparent empirical support for t ...
Macroeconomics 6
... The motivation of the course. This is the sixth and final part of the required macroeconomic sequence at NES. The goal of the sixth module is to utilize the methodology and knowledge obtained in the previous five modules and consider questions relevant for policy makers. Specifically, the course wil ...
... The motivation of the course. This is the sixth and final part of the required macroeconomic sequence at NES. The goal of the sixth module is to utilize the methodology and knowledge obtained in the previous five modules and consider questions relevant for policy makers. Specifically, the course wil ...
Chapter 26 Appendix: Policy Disputes Using the Self
... restore an inflationary economy to long-run equilibrium. ...
... restore an inflationary economy to long-run equilibrium. ...
Debates in Macroeconomics: Monetarism, New
... a policy of steady and slow money growth—specifically, that the money supply should grow at a rate equal to the average growth of real output (income) (Y). • While not all Keynesians advocated an activist federal government, many advocated the application of coordinated monetary and fiscal policy to ...
... a policy of steady and slow money growth—specifically, that the money supply should grow at a rate equal to the average growth of real output (income) (Y). • While not all Keynesians advocated an activist federal government, many advocated the application of coordinated monetary and fiscal policy to ...
Debates in Macroeconomics: Monetarism, New
... a policy of steady and slow money growth—specifically, that the money supply should grow at a rate equal to the average growth of real output (income) (Y). • While not all Keynesians advocated an activist federal government, many advocated the application of coordinated monetary and fiscal policy to ...
... a policy of steady and slow money growth—specifically, that the money supply should grow at a rate equal to the average growth of real output (income) (Y). • While not all Keynesians advocated an activist federal government, many advocated the application of coordinated monetary and fiscal policy to ...
AP Macroeconomics
... AP Macroeconomics Course Syllabus AP® Macroeconomics course is designed as an initial college-level course in macroeconomics and as foundation for possible future study in economics or business. The course emphasizes economic principles as applied to the economy as a whole. Lessons include an analys ...
... AP Macroeconomics Course Syllabus AP® Macroeconomics course is designed as an initial college-level course in macroeconomics and as foundation for possible future study in economics or business. The course emphasizes economic principles as applied to the economy as a whole. Lessons include an analys ...
14.02 Principles of Macroeconomics Problem Set 4 Fall 2004
... 4. Suppose the aggregate supply takes the following form: P = (1.5) P e + (1 / 50)(Y − Yn ) and P=1. Assume we are in the short-run for now. What is the equilibrium output, Y*? What is the expected price level, Pe? Draw the AS-AD diagram. 5. The Keynesian government is up for reelection soon, and so ...
... 4. Suppose the aggregate supply takes the following form: P = (1.5) P e + (1 / 50)(Y − Yn ) and P=1. Assume we are in the short-run for now. What is the equilibrium output, Y*? What is the expected price level, Pe? Draw the AS-AD diagram. 5. The Keynesian government is up for reelection soon, and so ...
Economics 3307
... interesting implication that effect on Y of changes in AD depends on the extent to which the change in AD is accurately expected and/or perceived. More generally, the nature of price stickiness is not well understood. Prices appear to be more sticky some times than others. Macroeconomists do not hav ...
... interesting implication that effect on Y of changes in AD depends on the extent to which the change in AD is accurately expected and/or perceived. More generally, the nature of price stickiness is not well understood. Prices appear to be more sticky some times than others. Macroeconomists do not hav ...
PROBLEM SET 2 14.02 Macroeconomics March 1, 2006 Due March 6, 2006
... I. Answer each as True, False, or Uncertain, and explain your choice. 1. The IS relation is a behavioral relation, telling us how the suppliers of output respond to changes in the interest rate. 2. In an expansionary open market operation, the central bank sells bonds so as to make consumers wealthi ...
... I. Answer each as True, False, or Uncertain, and explain your choice. 1. The IS relation is a behavioral relation, telling us how the suppliers of output respond to changes in the interest rate. 2. In an expansionary open market operation, the central bank sells bonds so as to make consumers wealthi ...
Econ 2012: Macroeconomics
... 3. Explain why there is a "multiplier" process, and be able to calculate the expenditure multiplier. 4. Determine the equilibrium level of income if given an expenditure function. 5. Show equilibrium graphically using the AE model. 6. Describe situations that will cause the AE curve to shift and res ...
... 3. Explain why there is a "multiplier" process, and be able to calculate the expenditure multiplier. 4. Determine the equilibrium level of income if given an expenditure function. 5. Show equilibrium graphically using the AE model. 6. Describe situations that will cause the AE curve to shift and res ...
Document
... Criticism of Say’s Law of Markets Say’s law was criticized by J. M. Keynes on the following grounds. Supply does not create its demand Say’s law states that supply creates its demand but Keynes disagrees with this view. According to Keynes in modern times, demand does not increase as much as pr ...
... Criticism of Say’s Law of Markets Say’s law was criticized by J. M. Keynes on the following grounds. Supply does not create its demand Say’s law states that supply creates its demand but Keynes disagrees with this view. According to Keynes in modern times, demand does not increase as much as pr ...
Student Study Guide
... 3. living standards growth, stability and security, sustainability 4. economic development 5. economic, living standards 6. the business cycle 7. sustainability 8. classical economics 9. John Maynard Keynes 10. monetarist economics 11. False. They are studied in Macroeconomics. 12. False. Economic g ...
... 3. living standards growth, stability and security, sustainability 4. economic development 5. economic, living standards 6. the business cycle 7. sustainability 8. classical economics 9. John Maynard Keynes 10. monetarist economics 11. False. They are studied in Macroeconomics. 12. False. Economic g ...
Topic 1: Introduction to Economics 1 (The Price System)
... point B. Income rises from Y1 to Y2 and the real interest rate rises from r1 to r2. When the government increases its spending, total income Y begins to rise (from the Keynesian cross model). As Y rises, the economy’s demand for money rises and so, assuming that the supply of real balances is fixed, ...
... point B. Income rises from Y1 to Y2 and the real interest rate rises from r1 to r2. When the government increases its spending, total income Y begins to rise (from the Keynesian cross model). As Y rises, the economy’s demand for money rises and so, assuming that the supply of real balances is fixed, ...
Book Review of Keynes, Post-Keynesianism and Political Economy
... “Repetition, evolution and learning in games: from equilibrium to openendedness,” by Giuseppe Ciccarone and Robert Neugeboren follows the previous paper in being concerned with the prisoner’s dilemma, but otherwise moves somewhat farther away from concerns usually associated with Harcourt. It focus ...
... “Repetition, evolution and learning in games: from equilibrium to openendedness,” by Giuseppe Ciccarone and Robert Neugeboren follows the previous paper in being concerned with the prisoner’s dilemma, but otherwise moves somewhat farther away from concerns usually associated with Harcourt. It focus ...
Slide 1
... MORE INVESTMENT DEMAND (SHIFT CURVE TO THE RIGHT) a. ACQUISITION, MAINTENANCE, AND OPERATING COSTS MAY CHANGE b. BUSINESS TAXES MAY CHANGE c. TECHNOLOGY MAY CHANGE d. STOCK OF CAPITAL GOODS ON HAND WILL AFFECT NEW INVESTMENT e. EXPECTATIONS CAN CHANGE THE VIEW OF EXPECTED PROFITS F. INVESTMENT IS A ...
... MORE INVESTMENT DEMAND (SHIFT CURVE TO THE RIGHT) a. ACQUISITION, MAINTENANCE, AND OPERATING COSTS MAY CHANGE b. BUSINESS TAXES MAY CHANGE c. TECHNOLOGY MAY CHANGE d. STOCK OF CAPITAL GOODS ON HAND WILL AFFECT NEW INVESTMENT e. EXPECTATIONS CAN CHANGE THE VIEW OF EXPECTED PROFITS F. INVESTMENT IS A ...
Self-Adjustment or Instability?
... Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. ...
... Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. ...
Day One - Macro
... A Model of Consumer Demand First Law of Demand: As Price of Good X Decreases Quantity Demanded of Good X Increases (and vice versa) – other factors held constant ...
... A Model of Consumer Demand First Law of Demand: As Price of Good X Decreases Quantity Demanded of Good X Increases (and vice versa) – other factors held constant ...
AS & AD - Vincent Hogan
... • What we need to understand is why the economy might be stuck in an under-employment equilibrium and why decisive fiscal policy measures might be necessary to solve the problem ...
... • What we need to understand is why the economy might be stuck in an under-employment equilibrium and why decisive fiscal policy measures might be necessary to solve the problem ...
Ch25 - 山东大学课程中心
... 11. Suppose that a treaty is signed limiting armies throughout the world. The result of the treaty is that the public expects military and hence government spending to be reduced. If the new classical view or the economy is correct and government spending does affect the aggregate demand curve, pred ...
... 11. Suppose that a treaty is signed limiting armies throughout the world. The result of the treaty is that the public expects military and hence government spending to be reduced. If the new classical view or the economy is correct and government spending does affect the aggregate demand curve, pred ...
Untitled - HCC Learning Web
... 4) Keynes and Keynesians believed that capitalist economies are inherently unstable and that free markets make them even more so hence they advocate a more meaningful role for states and governments to play an activist role via fiscal policies to stabilize business cycles 5) Keynes and Keynesians be ...
... 4) Keynes and Keynesians believed that capitalist economies are inherently unstable and that free markets make them even more so hence they advocate a more meaningful role for states and governments to play an activist role via fiscal policies to stabilize business cycles 5) Keynes and Keynesians be ...