Microeconomics: Keynesianism(Fiscal policy)

1.       Identify what Keynes thought caused the Great Depression of the 1930s.

2.       Identify the most important cause according to Keynes and indicate what government policy he thought could be implemented to get the economy working again.

3.       What Keynesian government policy (policies) was (were) implemented to combat the Great Recession of 2007-2009? What Keynesian policy (policies) was (were) implemented to combat the blow to the national economy due to the Covid-19 lockdown?

4.       How big are the Keynesian Spending Multipliers in the real world? Find estimates of them.

5.       Choose one of these estimates (there are many) and use the Keynesian Autonomous Spending Multiplier formula to work backwards from the estimated size of the multiplier to what size the Marginal Propensity to Consume would have to be for that multiplier to be true.