The Keynesian prescription for curing recession

When Glen entered the situation, he proceeded to criticize Glen’s handling of the
matter in front of the other employees.

Glen took Willis into his office for a private one-on-one discussion. He first
told Willis that although he was free to offer his suggestions, opinions, and criti-
cisms regarding management, he was never again to do so in the presence of oth-
ers in the department. Glen then asked Willis, “It seems that lately you have a
great deal to say about management and specifically about how | manage this
department. Why this sudden active interest in management?”

Willis answered, “Last month I finished the first course in the management
program at the community college, a course called Introduction to Management
Theory. Now I’m in the second course, one called Supervisory Practice. I know
what I’m hearing—and quite honestly, it’s preety simple stuff—and when I see
things thar [ know aren’t being handled right, 1 feel chat [ have an obligation to
this hospital to speak up.”

Glen ended the discussion by again telling Willis that he expected all such crit-
icism and advice to be offered in private and never again in front of other employ-
ees. Overall, the conversation did not go well; more than once Glen felt that
Willis’s remarks were edging roward insubordination. Because of the uneasy feel-
ing the discussion left with him, Glen requested a meeting with the hospital’s vice
president of human resources.

After describing the state of the relationship between him and Willis in some
derail, Glen spread his hands in a gesture of helplessness and said, “I’m looking
for advice. Apparently on the strength of a course or two of textbook manage-
ment, this guy suddenly has all the answers. What can | do with him?”

Question 1
What is the Keynesian prescription for curing recession?

  • Keynesians prescribe increasing aggregate demand through government spending
    . Keynesians prescribe increasing aggregate demand through fiscal restraint
    . Keynesians prescribe decreasing aggregate demand through government spending
  • Keynesian

Question 3
Name some economic events which could cause aggregate demand to shift.
A. Artificial Intelligence used to manufacture industrial robots
~ B.A sudden decrease in population
~¢ A relative increase in prices in foreign countries
-~p New discoveries of oil in the Arctic
ef A change in consumer confidences prescribe decreasing aggregate demand through fiscal restraint

What is the Keynesian prescription for inflation?
A Keynesians prescribe increasing aggregate demand through fiscal restraint
Bg Keynesians prescribe decreasing aggregate demand through increased government spending
C. Keynesians prescribe decreasing aggregate demand through fiscal restraint
D. Keynesians prescribe increasing aggregate demand through government spending

Explain what economists mean by “menu costs.”
A. Menu costs are the costs to seller of changing their product line
B. Menu costs are the costs to the employer of buying dinner for the company party
Menu costs are the profit benefits to suppliers of rapidly changing their prices.
D. Menu costs are the costs to seller of rapidly changing their prices.

In the Keynesian framework, how might each of the below events affect AD, and result in either inflation or a recession?
A large increase the price of the homes that people own,causing them to feel richer. The interest rate rises. _ Rapid growth in the economy of a major trading partner. The development of a major new technology offers profitable opportunities for business.
A. AD will shift to the right and may cause inflation. B. AD will shift to the left and may cause recession.

Why do sticky wages and prices increase the impact of an economic downturn on unemployment and recession?
A. Since wages and prices adjust quickly, markets come into equilibrium more quickly
Since wages and prices adjust quickly, markets cannot come into equilibrium, and labor B. shortages result.
Since wages and prices cannot adjust quickly, markets cannot come into equilibrium, and labor C. surpluses (unemployment) results.
D. Since wages and prices can adjust quickly, markets come into equilibrium more quickly, and labor surpluses (unemployment) results.

The following statements relate to the output gap. Match each term to the statement that best describes it. Each label is used only once.
This type of gap states that the economy’s actual output level is below the economy’s potential output level.
A. Supply gap B. Expansionary gap
This type of gap is measured at a point in time and is the difference between the economy’s actual output c. Recessionary gap ,. level and the economy’s potential output level.
This type of gap states that the economy’s actual output level is above the economy’s potential output , level.
D. Inflationary gap
Output gap E.

Pr. Lev. 22° 210 2S” 100 180 170 IGO 150 1e0 130 .120
Poteetal GC I

11°0 1000.0 .0.0 54:.
AC
The graph above shows: A. An inflationary gap equal to 1,000 billion B. An inflationary gap equal to 6,000 billion c. An recessionary gap equal to 1,000 billion D.A recessionary gap equal to 6,000 billion