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Table of Contents Why were Keynesian ideas revolutionary? 2 How does Keynes theory work? 4 What economic conditions in your news article that require government intervention? Do you have faith that this intervention will be effective? 7 How have the economists’ views on Keynesian economics changed over time? 9 Is Keynesian economics dead today? 12 Works Cited 14 Appendix A 15 Why you should be wary of the Japanese “revival” 15

Why were Keynesian ideas revolutionary?
Keynesian economics is a macroeconomic theory developed by John Maynard Keynes, who is a British economist. According to Keynesian theory, government intervention plays an important role in the economy, and focuses on short-term goals. It is used mostly in times of recession, inflation, unemployment to stabilize the business cycle, therefore active government policy is required and government spending is a good way to put money back into the GDP. ( Keynes is famous for his simple explanation for the cause of the Great Depression during the 1930s. His idea was based on a circular flow of money, which states that when spending increases in an economy, earnings will also increase, and the outcome it will lead to even more spending and earnings (economic growth). His ideas had led to a revolution in economic thought. ( During the period of World War 2, United States president has spent enormously huge on defence which has that helped revive the U.S economy. Besides that, Paul Volcker has overcome the recession on 1980 – 1982 with Keynesian method. He had applied the technique of increasing interest rates and constricting the money supply, as the results the economic is recover. On the other hand, Keynes claimed that depending on markets to obtain full employment was not a good concept. Therefore, Keynes has removed the classical economic theory…...

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