Question

Consumers sought the biggest bang for their economic stimulus bucks in​ June, sending the sales of discount merchants such as​ Wal-Mart and Costco surging. ... As the economy remains weak ... shopperslong dashrich and poorlong dashare flocking to discounters for​ low-cost goods. ...​ Wal-Mart Stores Inc. trounced analyst expectations Thursday with a 5.8 percent jump in June​ sales, ... attributing the increase to the​ government's economic stimulus payments. ... The retailer said sales jumped across the board. But the most dramatic increases were in​ entertainment, particularly for​ flat-screen televisions, and​ apparel, especially in swimwear and sportswear. ... Another major​ retailer, the warehouse club Costco​ Wholesale, beat analyst expectations with a 9 percent increase in​ same-store sales for June. ...​ Target, a top competitor to​ Wal-Mart, said that its​ same-store sales edged up 0.4​ percent, well above the 0.5 percent decline projected by analyst consensus.

Read the news​ clip, then answer the following question.

The​ ______ macroeconomic school of thought justifies the policy discussed in this news clip.

A.monetarist
B.new classical
C.Keynesian
D.classical

Answer 1

The Keynesian macroeconomic school of thought aligns with the policy of economic stimulus described in the news clip, as it supports government intervention to boost demand and economic activity, which was reflected in the increase in retail sales at stores like Wal-Mart and Costco.

Step-by-step explanation:

The Keynesian macroeconomic school of thought justifies the policy discussed in the news clip. Keynesian economics advocates for increased government expenditure and lower taxes to stimulate demand and pull the global economy out of a downturn. This approach is supported by the argument that when individuals receive government stimulus checks, like the economic stimulus payments mentioned in the news clip, they are likely to spend that money, which can help boost retail sales and overall economic activity.

As described in the news clip, retailers such as Wal-Mart and Costco saw a surge in sales due to the government's economic stimulus payments. This aligns with Keynesian principles, which suggest that short-term government spending can drive economic growth, particularly during periods of economic weakness. These increases in sales, particularly in sectors like flat-screen televisions and apparel, indicate that the stimulus was successful in increasing consumer spending, which is a central tenet of Keynesian economic theory.