Keynesian Economics (Kelly)
Keynesian economics- is a theory of total spending in the economy (called aggregate demand) and its effects on output and inflation.
(http://www.econlib.org/library/Enc/KeynesianEconomics.html)
(http://www.econlib.org/library/Enc/KeynesianEconomics.html)
John Maynard Keynes:
-Wrote " The General Theory of Employment, Interest, and Money"
-It explained that the reason they were in a depression was because millions were willing to work, yet couldn't find jobs
-The fundamental cause: inadequate demand
-Wrote " The General Theory of Employment, Interest, and Money"
-It explained that the reason they were in a depression was because millions were willing to work, yet couldn't find jobs
-The fundamental cause: inadequate demand
Keynes Theory requires government to :
-Increase money supply
-Lower interest rates( encourages investment)
-Undertake public work projects
-Redistribute incomes through tax policy
Outcome:
-No one used his theories until World War II with Franklin Roosevelt
-Increase money supply
-Lower interest rates( encourages investment)
-Undertake public work projects
-Redistribute incomes through tax policy
Outcome:
-No one used his theories until World War II with Franklin Roosevelt
Comic Strip
The New Deal
Roosevelt's approach to fix the economy and end the depression
What it did
-Legislation to prevent bank collapse
-Provide jobs
-Minimum wage
-Provide social security
What Ended the Great Depression
Massive military spending during ww2
Roosevelt's approach to fix the economy and end the depression
What it did
-Legislation to prevent bank collapse
-Provide jobs
-Minimum wage
-Provide social security
What Ended the Great Depression
Massive military spending during ww2