Question

What was the government's role before Keynesian economic theory, did the government get involved at all...

What was the government's role before Keynesian economic theory, did the government get involved at all with market interactions between demand and supply?  

Homework Answers

Answer #1

Before keynes, there is classical model which is based on laissez faire policy i.e. Govt. Should not interfere in the functioning of the market. In this thaught, Govt. Should not use fiscal or monetary policy to correct disequilibrium. Because classical assumes the complete crowding out which says any increase in G will automatically reduces tge private aggregate espenditure leading to aggregate demand same. Thus Government should only ensure that market is functioned under free flow. There should be no interference of any and adjustment in demand and supply will automatically move economy to equilibrium.Govt. Should intervene to provide good market but govt. Should not intervene demand and supply.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Analyze the Keynesian perspective on market forces and the role of government policy in economic management.
Analyze the Keynesian perspective on market forces and the role of government policy in economic management.
Agree or disagree: 75+ words The Keynesian Economic Model is an economic theory of spending in...
Agree or disagree: 75+ words The Keynesian Economic Model is an economic theory of spending in the economy and its effects on output and inflation. This advocated increased government expenditures and and lower taxes to stimulate demand and pull the economy out of depression. This was developed during the 1930s in hopes of being able to understand the Great Depression. A Keynesian believes that demand is influenced by public and private economic decisions. According to the Keynesian theory, demand has...
Classical economists and Keynesian economists disagree about what the government should do when the economy experiences...
Classical economists and Keynesian economists disagree about what the government should do when the economy experiences high levels of unemployment. A big difference between the two theories is that: Keynesian theory emphasizes correcting the economy on its own because of the three lags, while classical economic theory supports economic changes that benefit consumers of a country. Keynesians emphasize increases in total spending (aggregate demand), while classical economists emphasize increases in production (aggregate supply). All of the listed answers are differences...
1. How well did Singapore's economy perform between 1965 and 1992? 2. What role did government...
1. How well did Singapore's economy perform between 1965 and 1992? 2. What role did government policies play in Singapore's economic development? 3. What role did contextual factors (i.e., location, history etc.) play in Singapore's economic development? 4. How can we organize these ideas? 5. To what extent did productivity growth contribute to Singapore's performance? 6. Should Singapore change its strategy as of August 1992? Explain.
If a Keynesian economist were asked to make a statement about the relationship between the government...
If a Keynesian economist were asked to make a statement about the relationship between the government and the economy, what might she say? a. “Government intervention in the economy is sometimes necessary.” b. “Government intervention is the only solution for economic problems.” c. “It is never a good idea for the government to intervene in the economy.” d. “The government should be primarily concerned with public safety and health.” e. “The government’s only role is to provide defense and protect...
55. When compared with monetarist theory, Keynesian theory places greater emphasis on: (a) changes in supply...
55. When compared with monetarist theory, Keynesian theory places greater emphasis on: (a) changes in supply of money as a determinant of GDP and inflation; (b) totally discounts the role of monetary policy in determining GDP and inflation; (c) fiscal policy as a determinant of money supply (d) changes in interest rates as a prerequisite to GDP growth and inflation. 56. Over time, the flattening and shifting inward of the traditional Phillips Curve suggests that: (a) the relationship between inflation...
Taxation, government intervention, supply and demand, and economic growth: Discuss the relationship between taxation, government intervention,...
Taxation, government intervention, supply and demand, and economic growth: Discuss the relationship between taxation, government intervention, and supply and demand and its relationship to economic growth. How do theese economic relationships differ between the United States economy and the economy in China? What advise would the United States be able to give China in order to increase these areas and grow their economy further?
What are your thoughts/ conclusions concerning how much government should get involved with respect to the...
What are your thoughts/ conclusions concerning how much government should get involved with respect to the issue of climate change?
All I WANT TO KNOW IS HOW DID THE TEACHER GET THE ECONOMIC PROFIT OF 62....
All I WANT TO KNOW IS HOW DID THE TEACHER GET THE ECONOMIC PROFIT OF 62. Abe grows beautiful orchids. His total fixed cost is $72 a day, and his average variable cost is a constant $1 a plant. Abe is maximizing his profit by selling 18 orchids a day for $5 a plant and makes zero economic profit. Few people know about Abe's Orchids and Abe thinks that if he spends $46 a day on advertising he can increase...
When the economic outlook improves, the probability of bankruptcy decreases. Use the loanable funds theory with...
When the economic outlook improves, the probability of bankruptcy decreases. Use the loanable funds theory with the appropriate supply and demand diagrams to explain what happens to the size of the risk premium between the corporate and the Treasury bonds.  
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Assume the following information regarding U.S. and European annualized interest rates: Currency                          &n
    asked 8 minutes ago
  • What is the basis of reliability for the following: 1)Dying declaration 2) business records 3)excited utterness...
    asked 8 minutes ago
  • P6-9 (L02,4) (Analysis of Business Problems) James Kirk is a financial executive with McDowell Enterprises. Although...
    asked 16 minutes ago
  • Written story about someone who engages in primary deviance and then becomes a secondary deviant. Make...
    asked 20 minutes ago
  • If you have an elastic sample that you want to analyze by TEMI Which sample preparation...
    asked 20 minutes ago
  • Philosophy: Compare and contrast Plato’s notion of form to that of Aristotle’s. How do their respective...
    asked 20 minutes ago
  • Metal Oxide Varistors MOV's are non-ohmic variable resistors used in surge protectors to stunt away excessive...
    asked 48 minutes ago
  • GreenTree Financing lent an engineering company $100,000 to retrofit an environmentally unfriendly building. The loan is...
    asked 1 hour ago
  • A piano tuner using a 264 Hz tuning fork hears 6beats per second while playing the...
    asked 1 hour ago
  • The electric field of a uniformly charged ring centered at the origin and laying on the...
    asked 1 hour ago
  • At a temperature of 252.4°C, the average velocity (meters / second) of a propane, C3H8, molecule...
    asked 1 hour ago
  • Ultrasound probes can resolve structural details with sizes approximately equal to the wavelength of the ultrasound...
    asked 2 hours ago