Session:12 The Keynesian Perspective
Critical Thinking Questions
Principles of Macroeconomics 3e | Leadership Development – Micro-Learning Session
Rice University 2020 | Michael Laverty, Colorado State University Global Chris Littel, North Carolina State University| https://openstax.org/details/books/principles-macroeconomics-3e
17. In its recent report, The Conference Board’s Global Economic Outlook 2015, updated November 2014
(http://www.conference-board.org/data/globaloutlook.cfm), projects China’s growth between 2015 and
2019 to be about 5.5%. International Business Times (http://www.ibtimes.com/us-exports-china-havegrown-294-over-past-decade-1338693) reports that China is the United States’ third largest export
market, with exports to China growing 294% over the last ten years. Explain what impact China has on the
U.S. economy.
18. What may happen if growth in China continues or contracts?
19. Does it make sense that wages would be sticky downwards but not upwards? Why or why not?
20. Suppose the economy is operating at potential GDP when it experiences an increase in export demand.
How might the economy increase production of exports to meet this demand, given that the economy is
already at full employment?
21. Do you think the Phillips curve is a useful tool for analyzing the economy today? Why or why not?
22. Return to the table from the Economic Report of the President in the earlier Work It Out feature titled “The
Phillips Curve for the United States.” How would you expect government spending to have changed over
the last six years?
23. Explain what types of policies the federal government may have implemented to restore aggregate
demand and the potential obstacles policymakers may have encountered.
(http://www.conference-board.org/data/globaloutlook.cfm), projects China’s growth between 2015 and
2019 to be about 5.5%. International Business Times (http://www.ibtimes.com/us-exports-china-havegrown-294-over-past-decade-1338693) reports that China is the United States’ third largest export
market, with exports to China growing 294% over the last ten years. Explain what impact China has on the
U.S. economy.
18. What may happen if growth in China continues or contracts?
19. Does it make sense that wages would be sticky downwards but not upwards? Why or why not?
20. Suppose the economy is operating at potential GDP when it experiences an increase in export demand.
How might the economy increase production of exports to meet this demand, given that the economy is
already at full employment?
21. Do you think the Phillips curve is a useful tool for analyzing the economy today? Why or why not?
22. Return to the table from the Economic Report of the President in the earlier Work It Out feature titled “The
Phillips Curve for the United States.” How would you expect government spending to have changed over
the last six years?
23. Explain what types of policies the federal government may have implemented to restore aggregate
demand and the potential obstacles policymakers may have encountered.