Do supporters of the Keynesian perspective generally prescribe a hands-off approach to managing the economy, or support an active role for the government in managing the economy? Why? (12.4)
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Do supporters of the Keynesian perspective generally prescribe a hands-off approach to managing the economy, or support an active role for the government in managing the economy? Why? (12.4)
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- Contrast Say’s Law from Keynes’ Law. Give a rationale given by supporters of each perspective. Are these perspectives compatible? (11.1)Discuss what is meant by Aggregate supply (AS) and the AS curve; why is it relatively horizontal at real GDP far below potential GDP and relatively vertical close to or above potential GDP? (11.2)Discuss how decisions by consumers (householders) and firms can shift the AD curve left or right. Holding AS constant, explain how this will tend to change the equilibrium price level and real GDP produced in the economy. Lastly, how could the government play a role in helping the economy recover from a recession in this model? (11.4)
- After staying virtually flat for about a year and a half, the average lending rate of banks has started to show signs of decline in April after the Bank of Ghana reduced the monetary policy rate the month before. The Summary of Economic and Financial Data (May 2020) published by the Bank of Ghana has shown that average lending rate has finally moved out of its comfort zone to a step downward. Prior to recording 22.38 percent in April, the average lending rate has since the past 17 months (December 2018) not come below 23%.How would banks benefit when interest rates decrease?What is Aggregate Demand (AD), making sure to list its spending components, and explain why is AD curve downward sloping? (11.2)COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost economic growth. As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. Would a cut in stamp duty and other purchase charges on the purchase of existing houses really boost the economy?
- COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost economic growth. As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. In particular, she wishes to know the following: Would a cut in stamp duty and other purchase charges on the purchase of existing houses really boost the economy? Your advise on this is ____________________ (provide your answer and justification on both the immediate and future impact. Feel free to use external resources to assist you in your answer if you prefer). Is the claim that lower company taxes adding to investments correct or is it…COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost economic growth. As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. In particular, she wishes to know the following: Would a cut in stamp duty and other purchase charges on the purchase of existing houses really boost the economy? Your advise on this is ____________________ (provide your answer and justification on both the immediate and future impact.COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost economic growth. As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. In particular, she wishes to know the following: Would a cut in stamp duty and other purchase charges on the purchase of existing houses really boost the economy? Your advise on this is ____________________ (provide your answer and justification on both the immediate and future impact. Feel free to use external resources to assist you in your answer if you prefer).
- COVID-19 has impacted the global economy, spreading across nations with alarming speed, infecting millions. According to Statista, India saw an unemployment rate of 6 percent in January 2021, higher than the pre-pandemic level. Unemployment rate had gone up to nearly 24 percent in April 2020. This was possibly a result of a decrease in demand as well as the disruption of workforce faced by companies. Despite a modest recovery, the economy is still far-off the pre-pandemic level. Given this scenario, which of the following might happen? Consumer spending on luxury goods will increase. Consumer spending for food will increase. Government expenditure will increase. Investment for pharmaceutical products might increase.COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost economic growth. As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. In particular, she wishes to know the following: Your father has just stated that countries with high levels of debt-to-GDP ratios are poor countries and that countries with low levels of debt-to-GDP ratios are rich countries. Explain why you agree or disagree with this statement and provide real world evidence to support your argument.RISING FOOD PRICES DUE TO RUSSIA-UKRAINE CONFLICT When Russia invaded Ukraine in February 2022, no one knew how long the conflict would last, or how deep the impact would be for Europe or the rest of the world. As the war approaches its third month, the outlook from the conflict does not look good. Against an already global inflationary pressures due to rising food and energy prices and disrupted supply chains following the coronavirus pandemic (Covid-19), the war between Russia and Ukraine is increasing supply and demand tensions, affecting consumer sentiment and global economic growth. The World Bank and International Monetary Fund (IMF) expected supply shocks to increase dramatically for commodity prices in cases where Russia and Ukraine are major suppliers. Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn. Reduced supplies of these commodities have driven their prices up sharply. The impact of the war in Ukraine was already slowing…