Question

the US economic theories classical and Keynesian. Which one is the US using in the current...

the US economic theories classical and Keynesian. Which one is the US using in the current economy? or is it a mix?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Classical economic theory cautions state against its participation in economic activities and believes that free market system deliver efficient result. Full employment is general condition.

Conversely, Keynesian theory does not subscribe to classical theory and argues that full employment is not general condition. Thus, government should must make active participation in economic activities to restore equilibrium.

US economy was hit by the economic crisis in 2008 -09, Private economic system could not mend the things that had gone unintended ways. Federal government announced huge packages to restore equilibrium. Thus, gradually, unemployment got reduced from peak of 10 %.  But now government has achieved unemployment target of 4 % or it is condition of full employment.

Thus, government in USA is following Keynesian theory.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Classical economists and Keynesian economists disagree about what the government should do when the economy experiences...
Classical economists and Keynesian economists disagree about what the government should do when the economy experiences high levels of unemployment. A big difference between the two theories is that: Keynesian theory emphasizes correcting the economy on its own because of the three lags, while classical economic theory supports economic changes that benefit consumers of a country. Keynesians emphasize increases in total spending (aggregate demand), while classical economists emphasize increases in production (aggregate supply). All of the listed answers are differences...
Does the current government and FED policy resemble Keynesian or classical? Explain why?
Does the current government and FED policy resemble Keynesian or classical? Explain why?
1) Compare and contrast the way Classical and Keynesian theory determine the Demand for Money and...
1) Compare and contrast the way Classical and Keynesian theory determine the Demand for Money and how it is related to the Money Supply. As a part of your comparison, indicate which of these theories developed the concept of a Liquidity Trap and what this does to the Demand for Money as part of that theory.
What determines output in the short Run? Explain using the Classical model, Keynesian model or Phillips...
What determines output in the short Run? Explain using the Classical model, Keynesian model or Phillips curve.
What determines output in the Long Run? Explain using the Classical model, Keynesian model or Phillips...
What determines output in the Long Run? Explain using the Classical model, Keynesian model or Phillips curve.
What determines Interest rates in the Short Run? Explain using the Classical model, Keynesian model or...
What determines Interest rates in the Short Run? Explain using the Classical model, Keynesian model or Phillips curve.
Current debates about ideas to revive the economy generally fall into alignment with either classical or...
Current debates about ideas to revive the economy generally fall into alignment with either classical or Keynesian economic theory. Some suggest that growing U.S. debt is a strong incentive for tax reform. (1) Should we have a flat tax? Why or why not? (2) What are the merits and risks of other tax-based reforms? Please assess at least one additional reform. Examples include, but are not limited to: a national sales tax, value added taxes (VAT), eliminating a variety of...
Briefly summarize any one of the classical theories of Marx, Weber, or Durkheim from the Chapter....
Briefly summarize any one of the classical theories of Marx, Weber, or Durkheim from the Chapter. What is their contribution to the discipline?
Explain about political economy view related current economic condition such as china and us trade conflict?
Explain about political economy view related current economic condition such as china and us trade conflict?
Following the economic and financial events of 2008 that pushed the US economy in a deep...
Following the economic and financial events of 2008 that pushed the US economy in a deep recession, the Federal Reserves acted to decrease the short-term interest rate to historically low levels. a) Explain in words what effect did the Fed hope the action would have on output (Y), consumption (C) and investment (I). b) Explain in words which curves shift AND in which direction in the Keynesian cross graph and in the IS-Fed Rule graph.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT