View the step-by-step solution to:

Often recession leads us to spend less, whether or not our jobs are impacted.

Often recession leads us to spend less, whether or not our jobs are impacted. Keynesian economists create policies that help stimulate aggregate demand to encourage us to spend more. The theory is that by encouraging spending, we will end up keeping more working and discourage layoffs. 

The other school of thought encourages leaving the economy to work itself out and saving money instead of spending. Saving allows for increased investment in the future and this is essential to long-run growth. 

When thinking of this, which do you think is the correct answer? Does spending or saving help our economy thrive? This is a subjective question and your thoughts are appreciated.

Use at least two of the following terms in your answer:

  • Disposable Income
  • Real GDP
  • Sticky wages and prices
  • Neoclassical perspective

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question