Keynesian Economics Question

KEYNESIAN ECONOMICS. 1. What was the significance of the Great Depression of the 1930s? The poke out period of high unemployment and recessions of the 1930s was thought not to be possible by Neo-classical economists and that a self correcting and self encounter economy would bring the labour market back into counterpoise at full employment due to wage and write off flexibility. This did not happen. New thinking was required, enter Keynes! 2. What did Keynes argue in his book The Economic Consequences of the Peace? He argued that reparations forced on Germany by the Allies after WW1 were far too loathsome and would cripple the German economy to such an extent and would abandon to socio-political problems in the future which would not be in the gratify of the Allies. He saw that the financial burden of reparations on Germany would not allow the development of a stable economy. Could WW2 have been averted if Keynes had been listened to at th e Peace Conference at Versailles in 1918 where he strongly put this argument? 3. What was Keynes fundamental criticism of Neo-Classical Economics? The Neo-Classicals entertain for granted that full employment would naturally occur manoeuvre by market forces. In equilibrium the economy would forever and a day be at full employment.

Keynes argued that equilibrium was possible at less(prenominal) than full employment so that if unemployment occurred it would not always be automatically corrected. 4. Keynes work brought about a distinction amidst large and Micro Economics. Distinguish between the two. Macroeconomics looked at the e conomy in terms of aggregates and examines ! the behaviour of the economy in terms of income and function flows with limited references to prices. Microeconomics is concerned with the behaviour of individual prices and quantities and the pattern of mental imagery allocation. 5. Briefly outline Keynes critique of the major pillars of...If you want to unwrap a full essay, order it on our website: OrderEssay.net

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