ECO 372 Week 2 DQs

Discussion Questions

Explain the viewpoints of classical and Keynesian economists. How did the economy that existed at the time of these theories influence them? Which theory is more appropriate for the economy today? Why?

Why do Keynesian economists believe market forces do not automatically adjust for unemployment and inflation? What is their solution for stabilizing economic fluctuations? Why do they believe changes in government spending affect the economy differently than changes in income taxes?

In your opinion, which two determinates currently have the greatest impact on aggregate demand and supply? Justify your response with an example.

What is the difference between contractionary and expansionary fiscal policies? Which is more appropriate today? Explain your answer. How might contractionary and expansionary fiscal policies affect your organization?