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In the Keynesian framework, which of the following events might cause a recession? Which might cause inflation? a . A large increase in the price
In the Keynesian framework, which of the following events might cause a recession? Which might cause inflation?
a A large increase in the price of the homes people own. Rcession
A large increase in the price of the homes people own would likely reduce consumer spending and investment, leading to a leftward shift in aggregate demand AD
b Rapid growth in the economy of a major trading partner. Recession
c The development of a major new technology offers profitable opportunities for business. Inflation
The development of a major new technology offering profitable opportunities for business might increase investment and aggregate demand, leading to inflationary pressures.
d The interest rate rises. Inflation
e The good imported from a major trading partner become much less expensive.
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