Macroeconomic forecasts from different computer models are usually   Very different because the models are based on different data sets, different assumptions, and different macroeconomic theories. Very similar because the models use the same data, and standardized assumptions so it does not matter whether a supply-side economist or a Keynesian economist conducts the research.

Q: Draw and properly label an AD-AS model to show Keynesian, intermediate, and neoclassical zones.…

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Q: The simple Keynesian model   a. understated the effect of an increase in government spending by…

A: In the simple Keynesian model when income is determined, the price level is assumed to be constant…

Q: What would a Keynesian likely recommend in response to a recession? What would a neoclassical likely…

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Q: Question 1: Evaluate the importance of AD/AS models from a macroeconomic standpoint and analysis

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Q: Assume the following macroeconomic conditions in the United States and that US policy makers desire…

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Q: Which of the following government policies would be supported by Keynesian macroeconomic…

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Q: Consider a standard AD-AS model. The economy is affected by the following sequence of events. In…

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Q: In our four main macroeconomic models, which of the following statements is false? Our macro models…

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Q: In the Keynesian Cross model, an increase in government purchases by one unit would generate an…

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Q: Compare and contrast the ideas of Keynes and the policies based on his ideas with the ideas and…

A: The Keynes and Supply side economics are two distinct  economic theories. Both stress upon different…

Q: Assume the following macroeconomic conditions in the United States and that US policy makers desire…

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Q: In the Keynesian model, an increase in government spending increases ___. A.aggregate demand by an…

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Q: Use the Keynesian Cross model to show an economy in a recession. Label all key points.

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Q: A principle difference between the new Classical and the new Keynesian models has to do with the…

A: New classical theory is based on models on perfectly competitive consumers, producers and labor…

Q: A general-functional form of the IS-LM model is given. A goods market is described by the following…

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Q: When a recession begins and ends is determined by the Business Cycle Dating Committee (chaired by…

A: Recession is a macroeconomic term that means that there is a great decline in general economic…

Q: Consider a standard AD-AS model. The economy is affected by the following sequence of events. In…

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Q: Assume the following macroeconomic conditions in the United States and that US policy makers desire…

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Q: All of the following will increase Aggregate Demand (AD), except: Foreign income increases Families…

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Q: In the Macro Model, an increase in the amount of Capital in an economy due to Investment spending…

A: To determine the effect of an increase in the amount of capital due to investment spending.

Q: In the classical model, equilibrium occurs at full employment, whereas in the Keynesian model,…

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Q: The Keynesian cross model is derived assuming that the interest rate is constant. True or False

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Q: importance of AD/AS models from a macroeconomic standpoint

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Q: A general-functional form of the IS-LM model is given. A goods market is described by the following…

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Q: 'Keynesian policies to solve the problem of unemployment will not work because they will conflict…

A: Keynesian macroeconomics mentions, that the solution to a recession is on account of the…

Q: Consider an AS AD diagram.  What would happen in the model if Energy prices increased? Group of…

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Q: Consider the neo-classical approach to macroeconomics.  Given there is a recessionary period, that…

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Q: What is the best approach to managing the economy, supply-side or demand-side economics? There are…

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Q: In the Keynesian model, if there is a sudden rise in the aggregate demand curve, in the short run,…

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Q: A general-functional form of the IS-LM model is given. A goods market is described by the following…

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Q: Draw and properly label an AD-AS model to show Keynesian, intermediate, and neoclassical zones (6%).…

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Q: Consumption, investment, government spending, exports, and imports are:

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Q: Which one of the following statements is true?

A: in the economy,

Q: Many economic policies fail because   Measurement difficulties prevent policymakers from correctly…

A: Economic policies are the government actions to dela with market instability.

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.