Keynesian Economic Was Developed By British Economist John Maynard Keynes

1033 WordsFeb 16, 20165 Pages
Keynesian economic was developed by British economist John Maynard Keynes during the 1930s as a way of understanding why the great depression happened. Keynes felt that if government expenditures increased and taxes were lowered, then the global economy could be pulled out of the depression. Macroeconomics is the study of national and regional economies. It examines economic factors like unemployment, gross national product, consumption, Inflation rates, Business cycle fluctuations and foreign trade. Keynes point of view about the Macro Economy was that the government must step in to correct the instability of the economy. If the economy faces a recession, government must increase demand by spending more; lowering taxes; lowering interest rates and increasing welfare. If the economy faces a time of inflation, the government must reduce demand by spending less; raise taxes; increase interest rates and reducing welfare. Fiscal policy is the use of government spending and taxes to control the economic activity of a country. This is decided upon and implemented by Congress. Macroeconomics mainly focuses on the total output generated within an economy. The dollar value of all goods and services produced within a nation during the course of a year is the Gross Domestic Product. Economic growth, which is the increase in Gross Domestic Product over time, is one of the 3 biggest goals. The other two are full employment and price stability. During a recession, a one-time
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