During the Depression, unemployment rose to 25 percent. The AS/AD model presented in the book suggests that
Question:
During the Depression, unemployment rose to 25 percent. The AS/AD model presented in the book suggests that a fall in the price level would have solved the problem. Keynesians are not so convinced and believe that a fall in the price level would have lowered income, which would have shifted aggregate demand back further.
a. Demonstrate the standard argument graphically.
b. How does it deal (or not deal) with that interconnection between a fall in the price level and aggregate demand? (Post-Keynesian)
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
PostKeynesian a In the standard argument the unemployment was caused by a fall ...View the full answer
Answered By
Jehal Shah
I believe everyone should try to be strong at logic and have good reading habit. Because If you possess these two skills, no matter what difficult situation is, you will definitely find a perfect solution out of it. While logical ability gives you to understand complex problems and concepts quite easily, reading habit gives you an open mind and holistic approach to see much bigger picture.
So guys, I always try to explain any concept keeping these two points in my mind. So that you will never forget any more importantly get bored.
Last but not the least, I am finance enthusiast. Big fan of Warren buffet for long term focus investing approach. On the same side derivatives is the segment I possess expertise.
If you have any finacne related doubt, do reach me out.
1+ Reviews
10+ Question Solved
Related Book For 
Question Posted:
