ECO401- answer plz

[mc090400472 Mehreen Humayun]

Unlike the classical economists, Keynes believed that the economy could get stuck in the short run for a significant period of time because of:

       ► Insufficient aggregate supply.

       ► Insufficient aggregate demand.

       ► Quick self correcting mechanism.

       ►  Government purchases of too many goods and services.

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________________
Mehreen Humayun
Distance Learning Student,
MBA 2nd Semester,
Virtual University, Pakistan

www.vuzs.net

[nadia asghar]

4

 

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[mc090403995 Khuram Shahzad]

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[Rehman Aslam]

►  Government purchases of too many goods and services.

[●๋•ιмяαη αℓι●๋•]

mje iska 2nd option lag raha hai coz Kenyes think Demand will create its own supply.
So if there is insufficient AD, it will Stuck the economy.
YE ECO B NA.... :(
may be 4th... plz discuss.

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[mc090402547 Syed Muhammad Toqir]

       ► Insufficient aggregate demand.

in short run, the smaller the aggregate demand , smaller will be national income and employment level.

[mc090400472 Mehreen Humayun]

yes u r right..eco is quite complicated....

even i was not sure for 4th option...

2nd sounds more favourable.

thanks.

[Rehman Aslam]

Which of the following is NOT conducive to the successful operation of a cartel?

       ► Market demand for the good is relatively inelastic.

       ► The cartel supplies all of the world's output of the good.

       ► Cartel members have substantial cost advantages over non-member producers.

       ► The supply of non-cartel members is very price elastic.

 A reason why some economists basically ignore the short run is because they believe that the economy:

       ► Has self-correcting mechanisms.

       ► Can only be graphed with a horizontal curve.

       ► Never needs correction.

       ► None of the given options

[●๋•ιмяαη αℓι●๋•]

► The supply of non-cartel members is very price elastic.

&
► Has self-correcting mechanisms.

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=====================================
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[mc090400472 Mehreen Humayun]

 A reason why some economists basically ignore the short run is because they believe that the economy:

        ► Has self-correcting mechanisms.

       ► Can only be graphed with a horizontal curve.

       ► Never needs correction.

       ► None of the given options.

[ahad jan ahad jan]

On 7/21/10, mc090400472 Mehreen Humayun <mc090...@vu.edu.pk> wrote:
> * A reason why some economists basically ignore the short run is because
> they believe that the economy:*
>
> ► Has self-correcting mechanism.correct (becoz most of the economist in the long run we r all dead.....saying keynsian which is)

>
> ► Can only be graphed with a horizontal curve.
>
> ► Never needs correction.
>

> * ► *None of the given options.
> *
> *

> --
> ________________
> Mehreen Humayun
> Distance Learning Student,
> MBA 2nd Semester,
> Virtual University, Pakistan
> www.vuzs.net
>

[/*~1 Nation~*\]

► Has self-correcting mechanisms.

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[mc090400472 Mehreen Humayun]

But I found this on net:

The process restoring the long run equilibrium is called the"self correcting mechanism."

so how it could be 1st option?

[/*~1 Nation~*\]

you can get your ans in your own reference

 

The process restoring the [long run equilibrium] is called the"[self correcting mechanism]."

[mc090400472 Mehreen Humayun]

it means that self correcting mechanisim is used for long term, then how will it help in short term??

[/*~1 Nation~*\]

The question says that why economists ignore short run? And the answer is that in short run the economy does not have much time to get stabilized. So short run is not considered by some economists due to short period and in long run there is enough time for an economy to get stabilized.  

[mc090400472 Mehreen Humayun]

ok thanks , now I got it, hehe

it means that for long run we need self mechanisim and short run already has it.

thanks.

[syed toqueer]

it doesn't mean that short run already has self mechnaisim. due to short tenure problem economic factors are not in position to fully utilized. so ecnomists ignore and long term facilitate the economists to predict about factors more accurately.