Keynesian view on savings.

Question

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Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

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Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

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Answer 3

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

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Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

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Answer 5

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Answer 6

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.

Answer 7

Chapter ST4, Problem 1CQ

To determine

Keynesian view on savings.

Answer 8

Expert Solution & Answer

Explanation of Solution

According to Keynesian economists, saving is a portion of the disposable income, which is left after meeting the consumption expenditure of a person. Keynes considered savings as a leakage of the economy. This is because Keynes argues that an increase in savings reduces the aggregate demand and thereby the economic growth. In addition to this, Keynesians suggest that an increase in public expenditure, either by conducting a war with military or financing public work projects, would help to recover the problem of economic recession. This also helps to maintain the level of full employment. Therefore, Keynes encourages the aggregate demand in the time of recession, whereas Hayek argues that savings is essential at the time of recession, which should be used to finance the investments.