Compare the views of Keynesian and mainstream economists on the effects fiscal stimulus has on real GDP and employment
What will be an ideal response?
Keynesian economists believe fiscal stimulus results in a boost of real GDP and employment as a result of the multiplier effect. Mainstream economists believe the Keynesian economists overstate the size of the multiplier. They believe the stimulus "crowds out" private expenditures and investments and create a greater burden of government debt on future generations.
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The intellectual leader of new classicals is
A) Edward Prescott. B) John Taylor. C) Stanley Fischer. D) Ben Bernanke.
When the demand curve is vertical and the supply curve is upward sloping,:
a. a rise in the input price that increases marginal cost by $1, decreases the firm's profit by $1. b. a drop in the input price that lowers the marginal cost by $1, doubles the firm's profit. c. a drop in the input price that lowers the marginal cost by $1, decreases the output price by $1. d. a rise in the input price that increases the marginal cost by $1, doubles the output price.