During a recession, would classical economists propose that changes in government spending or taxes be used to improve economic conditions? Briefly explain

What will be an ideal response?

No. Classical economists do not endorse changes in government spending or taxes designed to offset business cycle fluctuations; the classical model shows that such policy attempts are not likely to improve macroeconomic conditions. From a classical viewpoint, government spending and tax decisions should be long-run decisions based on cost—benefit analysis.

Economics

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Refer to the figure above. Which of the following is true?

A) Firm 2 should follow Strategy X if Firm 1 follows Strategy X. B) Firm 2 should follow Strategy Y if Firm 1 follows Strategy Y. C) Firm 2 should follow Strategy X if Firm 1 follows Strategy Y. D) Firm 1 should always follow Strategy X.

Economics

If inflation is completely anticipated

A) borrowers lose in the economy. B) firms lose because they incur menu costs. C) lenders lose in the economy. D) no one loses in the economy.

Economics