Essays on Keynes

Deficit spending refers to the spending of funds more than the income. In government, deficit spending occurs when the government expenditure exceed the revenues collected over a specified fiscal period (Investopedia, 2016b). An important note on government deficit spending is that it begins at the budgeting stage where the government plans to spend more than it expects to get in revenues. The consequence of this is that the government has to borrow even with the achievement of the highest estimates in revenue collection. The government finances the deficit through two main ways. Traditionally, the major method of meeting the ...

Introduction:

We have seen economic progress through the centuries, and we have prized that progress because the same has been making our living standards better and it is giving us access to so many services. That of the United States is an economy which screams progress, but within this progress, the economy also hides a great flaw. In this economy, the rich seems to be getting even richer, while the poor suffer through the worse of the ups and downs, at least this is a question that we are going to prove true or false in this paper. As per ...

1. How were the conditions in 1935 and 2013 similar? What did John Maynard Keynes propose to resolve this crisis in his book? Both 1935 and 2013 are two years during which the world’s economy went through economic crises. Specifically, 1935 experienced the Great Depression, while 2013 faced the global financial crisis. The economists of the time predicted that the economy would come out of the depression without the intervention of the government (Kirshner 315). In 1935, unemployment was extremely high. In 1936, Keynes published his book ‘General Theory of Employment, Theory and Interest.’ While other economists suggested ...

1. The Financial Crisis: Avoidable but Inevitable Theoretically, the financial crisis could have been avoided as investigation findings revealed . Under the circumstances however, the crisis was an inevitable consequence of everything that was going. The Federal inquiry concluded that the 2008 financial crisis could have been avoided. The crisis was the result of “widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street”. It was the result of “greed, ineptitude or both” on the part of government and the private sector. Among the persons found responsible for the crisis included Federal Reserve Chairman Alan Greenspan and, ...

A capitalist depression is that period where the number of those employed drastically reduces simultaneously with the productive capacity associated physical capital. Wage and marginal productivity is a theory dictating that wages are payable at that level that is similar to the marginal revenue. Hunt (1979) notes that Keynes first departure was his insistence that the level of total income was extremely significant in influencing the amount of savings than the interest rates. The second departure was his argument that savings and investments were not determining factors of the interest rates. The consumption function is used in depicting the ...

The term liberal refers to the process of supporting proposals for reforms, opening up to new ideas in pursuit of progress, and being accommodative of people’s ideas and behaviours, which can simply be regarded as being broad-minded. Classical liberalism, on the other hand, has been described as the notion that government engagement in matters of the economy within the marketplace does not serve to promote growth. In that, the market alone can be depended upon to regulate the economy by seeing to it that effective business people prosper while ineffective business people sublime. Therefore, the law of demand ...

Introduction

A discussion among the classical economists and the Keynesian economists continues on the government intervention in the free markets. According to the classical economists, the free market mechanism can develop solutions for the crisis in the market if there is no external influence on the markets. The Keynesian economy merely expresses that the free market economy carries the risk of generating crises and undesired deficit or surplus in the economy when the demand cannot clear the supply (Posner 234-252). The discussion on the government intervention is changing direction each time the world economy suffers from a global crisis becomes ...

Structural Adjustment Programs (SAPs) are those economic programs which are implemented by the International Monetary Fund (IMF) and World Bank with an aim of improving the economic status of developing countries. This programs were started in the 1980s and loans which were based on the conditions that the borrowers have to abide to. These loans which are offered by the World Bank to the developing countries are referred to as Structural Adjustment Loans. They are called Structural Adjustment Loans because they are meant to adjust the structural development of these developing countries. The loans are meant to remove the ...

The IS LM model or the Hicks –Hansen model is the macroeconomic tool that shows the relationship between the interest rates and the real output of goods and services and the money market. The intersection of the investment - saving curve or the IS curve and liquidity preference curve or the money supply curve is the general equilibrium in both the markets .This model explains the changes in the national income when the price level is fixed in the short run and also shows the reason for the shift in the aggregate demand curve. It was first developed by ...

Keynes proposed economic ideas that saved the economy during the great depression of the 1930s. He encouraged government intervention into the economy to rescue it from the excessive recession. His ideas were against previous views held by an economist that the government should allow the economy to adjust back from depression to recovery as per the business cycle. The previous economic ideas were not working during great depression because the economy was showing little signs of recovery. The depression created a huge recession gap. Thus, real GDP was quite below the full potential output (Blinder 1). Keynes believed that ...

Assignment : Essay based on Chapter 5 of “Beggar thy neighbour”.

Assignment number

Assignment –A (1238 words) Essay-1 Question: The economic consequences of lending at compound interest resulted in loss of productive yield of the society. How finance dominated over economics and politics by using this concept of interest (Geisst 193)?

Introduction

The question given above poses a mandatory evaluation of the harmful impact of the compound interest based lending and consequent ease of loans for the people of America. The author, Charles Geisst, used the viewpoint of John Maynard Keynes to explain that the American society was so possessed by the idea of easily availing the loans using compounded ...

PART A- Questions related to ‘The Mystery of the Invisible Hand’

Jevons Marshall is a fictitious pen name used by the true author(s) of the book. Who really wrote the book? What makes ‘Jevons Marshall’ a clever choice for the pen name in this case? Answer. The pseudonym Jevons Marshall is used by two renowned professors of economics who are William Breit and Kenneth G. Elzinga. The pen name is derived from the surnames of two famous economists named Alfred Marshall and William Jevons. The pen name made from the names of these two economists is deliberately used for writing mystery novels based on economics as where the former ( ...

Savings defines the part of income which is not spent. Savings which is economic variable defines quantifies a person’s physical quality of life and standards of living. Proper banking is effective to improve one’s standards of living. It is the obligations of banks to become creative and create an efficient banking environment in the financial market. Implementing saving habits during the earlier days assist a person and family to attain a more stable life than a person who has no savings (Cummings 2). Embracing norms of saving money is a mode of safeguarding one from protecting someone ...