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Which is true about the readings on the Great Depression and Keynes? If leakages are greater than injections in the economy there will be unsold
Which is true about the readings on the Great Depression and Keynes?
If leakages are greater than injections in the economy there will be unsold goods and services.
Keynes agreed with neoclassical economists that laissezfaire capitalism would lead to the most efficient use of the factors of production possible the problem with the economy was that the level of incomes generated in the production process is never high enough to purchase the output that is being produced, so economies usually have insufficient aggregate demand.
In a recession, Keynes thought that lower wages would increase the level of employment because it would make it cheaper for businesses to hire workers. the problem with the economy was that the level of spending out of the incomes generated in the production process may not flow back to businesses, which would end up in a situation where businesses have insufficient aggregate demand for their products.
According to the readings assigned, despite what people says about Keynes he was actually interested in a workingclass revolution that would overthrow capitalism.
a capitalist economy is fairly stable and selfcorrecting according to Keynes. the two faults that Keynes saw with unregulated capitalism was its tendency to create excessive concentration of incomes and its inability to achieve or maintain full employment
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