There’s this question on the sample level 1: According to New Classical Economists, is financing a reduction in current taxes by government borrowing likely to result in an increase in (aggregate demand/real interest rate)? I read the Economics book throughly, but don’t recall there ever being mention about new classical economics (classical yes, new no). Can anyone explain?
No, is it in the curriculum? I think it is called Solow model and we might see it in L2.
It is in curriculum. neo classical model suggest, that in the long run GDP depends on country’s savings rate, but saving rates can’t be responsible for GDP growth.
Pepp, which reading/ss is this covered in?
just read this in readin 58
pepp, reading 58 is equity. I think it is more of an economics question and realting to fiscal policy. Reduction in taxes financed by borrowing will increase interest rates and it will also decrease AD bcoz of reduction in PS. But I have not read either about the New Classical economist. Can someone plz explain ? I am getting very sleepy
“Can someone plz explain ? I am getting very sleepy” Man I like the way you said it