Keynesiansim Flashcards
(23 cards)
Key Feature of Keynesianism 1 Reduce Gov…
debt
Key Feature of Keynesianism 2 what should happen to the market?
Deregulate
Key Feature of Keynesianism 3 state run industries should be…
Privatise
Key Feature of Keynesianism 4 Cut…
Public spending
Along with public spending what according to Keynes should be cut?
Taxes
Key Feature of Keynesianism 5 Reduction in … power
Reducing these would mean a reduction in the states power
1st problem with old system, in Keynes’ view, of wages at the time of the great depression
Wouldn’t fall enough or fast enough
When would business’ invest if interest rates were low?
when they perceived a possible rise in sales and pofits
When would sales rise?
When demand rose
Keynes’ solutions to great depression NO.1
Borrow money
Keynes’ solutions to great depression NO.2 create new and… ….
Create new + extra demand
Keynes’ solutions to great depression NO.3 … more
Invest more
Keynes’ solutions to great depression NO.4 … more
Employ more
Keynes’ solutions to great depression NO.5
Generate recovery
Solutions - gov should NO.1
Borrow money
Solutions - gov should NO.2 spend on… …. and … and investment
Spend on public projects and welfare and investment
Solutions - gov should NO.3 …. more than it gains in ….
Make sure its spent more than its taxed
Solutions - gov should NO.4 inject … … into the economy
Inject extra demand into the economy
Accelerator Effects NO.1 … and … rise - … can’t keep up
Sales and demand rise - business can’t keep up
Accelerator Effects NO.2 invest in new ….
Invest in new machines
Accelerator Effects NO.3 jobs created in … sector
Jobs created in the capital sector
Accelerator Effects NO.4 more … generally
More jobs generally
Accelerator Effects NO.5 … spending increase
Public spending increase
