Question

if keynes' law applies during economic contractions and say's law applies during economic expansion, how will the three goals of macroeconomics be affected?:principles of macroeconomics

Answer 1

If Keynes's law applies during economic contractions and Say's law applies during economic expansion, the way in which the three goals of macroeconomics would be affected is that: trade-offs and connections may differ in the short run and the long run.

What is macroeconomics?

Macroeconomics can be defined as a study of all the behaviors, performances, and factors that affect the entire economy. This ultimately implies that, macroeconomics typically focuses on aggregate phenomena such as the following:

• Gross Domestic Product (GDP).
• Inflation
• Price level
• Economic growth.

According to the law established by John Maynard Keynes, demand is an economic factor which creates its own supply. Additionally, the way in which the three (3) goals of macroeconomics would be affected are as follows:

1. Trade-offs may differ in the short run.
2. Connections may differ in the short run.
3. Connections may differ in the long run.
4. Trade-offs may differ in the long run.

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Complete Question:

If Keynes's law applies during economic contractions and Say's law applies during economic expansion, how will the three goals of macroeconomics be affected?

determinates of total supply for the economy will be traded-off

trade-offs and connections may differ in the short run and the long run

institutional and market structures will connect factors of production

the economy will face genuine limits to how much can be produced