Exam 14: The Great Recession, the Great Depression, and Great Macroeconomic Debates

If a classical economist were asked which factor is most important to ensuring economic growth, how might he or she respond?

One difference between the Great Recession and the Great Depression is that

Use the following graph to answer the next questions. This graph depicts an economy where aggregate demand has decreased, with no change in either short-run aggregate supply SRAS) or long-run aggregate supply LRAS). -During the Great Depression, the aggregate price level fell by 20 percent as depicted in the graph, suggesting that

When considering the basic operations of the macroeconomy, Keynesian economists argue that

If a Keynesian economist were asked to make a statement about the relationship between the government and the economy, what might he or she say?

Compare and contrast Keynesian and classical views on savings and government spending on the macroeconomy.

During the Great Recession, consumer sentiment in the United States declined, leading to a decrease in consumer spending. Which of the following factors caused this decrease in consumer sentiment?

The Great Recession began in

Keynesian economists believe that prices are sticky and do not adjust quickly, from which they concluded that

The Great Depression lasted longer and was deeper than the average recession, in part, because

When considering how the economy works, classical economists hold that

Classical economists believe that

When did the Great Recession begin and end? How many months did it last? When did the Great Depression begin and end? How many months did it last?

The Great Recession lasted longer and was deeper than the average recession, in part, because

Give three reasons why the Great Recession of 2007-2009 came to be known as the Great Recession.

Use the following graph to answer the next questions. The graph depicts an economy where aggregate demand and long-run aggregate supply LRAS) have decreased, with no change in short-run aggregate supply SRAS). -In the graph, we see that long-run aggregate supply decreased during the Great Recession. This was due to a decline in housing prices and the subsequent financial crisis. Why did these factors cause long-run aggregate supply to decrease?

The Great Recession lasted from ________ to ________.

During the Great Depression, aggregate demand in the U.S. economy decreased. As a result, the unemployment rate ________ and real gross domestic product (GDP) ________.

Keynesian economists believe that

Keynesian economists believe that prolonged recessions are possible because