6. Economists focus on executed economic performance. A. Phillips; short B. Keynesian; long C. Neoclassical: long D. Says, short 7. Which of the following statements represents a Keynesian view of macroeconomics? A. focus on the long-term growth of the economy B. aggregate supply is the primary determinant of economic output C create increases in aggregate demand to reduce unemployment D. vertical aggregate supply 8. If an economy experiences a decline in aggregate output, it falls below its potential GDP, which of the following events is likely to occur? demand due to lower consumer confidence and A. more consumption and less savings B. adjustment to potential GDP C. increase in price inflation D. increase in unemployment 9. Suppose an increase in business confidence has led to more investment in the economy and greater production. In Keynesian short-term analysis, increased aggregate demand will: A. decrease unemployment B. cause the government to reduce taxes. C. compel the government to increase its spending. D. exports will fall.
Answer 1
issue 6
The Focus of Keynesian Economics
The theory is the short-term performance of the economy.
This theory focuses on all
demand and its impact on the economy.
On the other hand, the neoclassical
Economic theory focuses on the long-term performance of
economy.
this theory is a supply side
the theory.
So,
Neoclassical economists place a
focus on long-term economic performance.
Therefore, the correct answer is
choice (C).
issue 7
Keynesian view of the macro
Economics focuses on changes in aggregate demand for
changes in the economy.
In case of unemployment, Keynes
theory suggests an increase in aggregate demand to induce
production and thus reduce unemployment in the short term.
Therefore, the correct answer is
choice (C).
issue 8
When the output of the economy falls
below potential GDP, then the recessive gap is created in the
economy.
Recession leads to downfall
production in the economy.
As production declines, jobs are lost
and unemployment in the economy increases.
Thus, the rise in unemployment
happen due to a certain scenario.
Therefore, the correct answer is
choice (D).
Question 9
Due to increased investment,
Aggregate demand in the economy has increased.
Given the global offer, this
the increase in aggregate demand will lead to an increase in production and
price level.
As production increases, more jobs
Will be created.
This will increase employment and
will reduce unemployment.
So,
The increase in aggregate demand
drop in unemployment.
Therefore, the correct answer is
option (A).