According to Keynes the demand for the goods in the long run could be altered by the governments. The monetarists however argued otherwise. They criticized the long run and the short run objectives of the Keynesian model because they argued that problems like the inflationary expectations could result. According to the monetarists the Keynesian model was based on a lot of assumptions. They also argues over the rules and the discretion stating that the governments and the banks could make rules but in order to achieve the long run objectives the implementation was compulsory. This discretion was not that likely practically. They argued that discretion was necessary instead of the rules.
Say’s law states that ‘the creation of one product immediately opens a vent for other products’. By this, Say wants to imply that the supply makes the demand for itself. This means that he argues that excess supply would result the demand to increase too so that the demand is ‘created’ for the supply. Keynes on the other hand believed that demand did not change all of a sudden. Rather it had to be managed by some practices. He criticized the law stating that the UK economy had been demand deficient during the war. Keynes also stated that if Say’s Law was to be true, then during the war the demand should have been created for the excess supply. On the contrary, what really had happened was that the demand had been deficient during the war.
In the circular flow model, if the business sector does not produce anything, then the households do not earn any income. This is where Say’s law is reflected in the model. Keynes critique to this notion was that although the revenue earned by the production in the firms does end up as income for the households, this may not happen instantaneously. Households are likely to spend as much income as they have.
In the 1940s the main change that had occurred in Britain was the switch to a market economy. The economy ...
Cite this document
(“The Evolution Of Macroeconomics in the UK Essay”, n.d.)
Retrieved from https://studentshare.net/miscellaneous/398160-the-evolution-of-macroeconomics-in-the-uk
(The Evolution Of Macroeconomics in the UK Essay)
“The Evolution Of Macroeconomics in the UK Essay”, n.d. https://studentshare.net/miscellaneous/398160-the-evolution-of-macroeconomics-in-the-uk.
Industry A has 20 firms and a Concentration Ratio (CR) of 20%. Industry B has 20 firms and a Concentration Ratio of 85%. Addressed in the paper are the names of these industry types, characteristics inherent, potential long run adjustments and implications of the anticipated adjustments.
Market booms and busts are evidences to how markets work. According to Charles Kindleberger, a self-proclaimed ‘literary economist,’ concludes that “markets generally work well but will need a little help on an occasional basis” (The Economist 2003: 2).
This paper explores the classical economics and its failures that led to the development of new macroeconomic thoughts following the Great Recession. This failure marked the emergence of Keynesian Revolution. Quite recently, Keynesian economics also began to exhibit flaws and this led to the development of other school of thoughts.
Similarly, high unemployment rate does not augur well for the economy as it tends to raise the income disparity among the people. The paper attempts to explore how unemployment and inflation can be tamed through policy matters. The US has experienced high unemployment and high inflation rates in the past.
explaining crowding-out using either the IS-LM or the Philips’s curve and to show how it affects the economy as it is used as a tool for achieving economic objectives of monetary and fiscal authorities. To achieve this objective, the IS/LM model will be employed to see how
The Economists Dictionary of Economics describes Macroeconomics as "The study of whole economic systems aggregating over the functioning of individual economic units. It is primarily concerned with variables which follow systematic and predictable
The actual or realized expenditure is the amount households, firms and government spend on goods and services, i.e. GDP (Y), while planned expenditure (E) is the amount they would like to spend on the same goods and services. Now the three major determinants
On the other hand South Korea recorded the most impressive growth in its livings standards since 1960 because it posted a growth of 1304.5%, while the United States posted a growth of 166.2% since 1960.
In that context, President Obama needs to look into some aspects of the American economy, which have not only traditionally constituted the essentials of American economy, but a neglect of which has really diluted the American economy. America badly needs to restore its
2 Pages(500 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic The Evolution Of Macroeconomics in the UK for FREE!