Questions from Macroeconomics

Q: Flexible wages play a critical role in removing an economy from a

Flexible wages play a critical role in removing an economy from a recessionary gap. Do you agree or disagree? Explain your answer.

Q: If the economy is in an inflationary gap, where is it

If the economy is in an inflationary gap, where is it located with respect to both the institutional PPF and the physical PPF?

Q: Explain the classical view of the credit market. /

Explain the classical view of the credit market.

Q: According to Keynesian economists, what is the explanation of why an

According to Keynesian economists, what is the explanation of why an economy may not be able to remove itself from a recessionary gap?

Q: Outline the differences between Keynes and the classical economists when it comes

Outline the differences between Keynes and the classical economists when it comes to; (a) Say’s Law in a money economy (b) Investment

Q: The shape of the aggregate supply curve matters to changes in the

The shape of the aggregate supply curve matters to changes in the price level and Real GDP, given a change in aggregate demand. Do you agree or disagree with this statement? Explain your answer.

Q: What is the difference between a price ceiling and a price floor

What is the difference between a price ceiling and a price floor? What effect is the same for both a price ceiling and a price floor?

Q: Diagrammatically represent and explain the equilibrating process in the simple Keynesian model

Diagrammatically represent and explain the equilibrating process in the simple Keynesian model in the TE-TP framework.

Q: In the simple Keynesian model, an economy can be in equilibrium

In the simple Keynesian model, an economy can be in equilibrium and in a recessionary gap too. Do you agree or disagree? Explain and diagrammatically represent your answer in terms of the AD-AS framew...

Q: Explain the difference between zero, incomplete, and complete crowding out

Explain the difference between zero, incomplete, and complete crowding out. If crowding out is complete, does it call into question the effectiveness of a rise in government purchases in order to remo...