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Keynesian model was developed during the great depression in 1930 by the British economist John Maynard Keynes. As per this theory government should increase expenditure and reduce taxes to increase demand and bring the global economy out of depression. Economics theories could be complex to understand unless you get the right kind of help. We at myhomeworkhelp.com have a track record of providing the best help in economics. If you are unsure where you can get The Complete Keynesian Model Introduction Homework Help, keep your worries aside now.
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The basic concept of Keynesian theory is that with the government intervention the economy can be stabilized. During the great depression of 1930, when the whole world economy collapsed, John Keynes came up with this revolutionary theory to provide solution. According to Keynes, less demand would mean higher unemployment. During recession the demand goes down as the spending of the people gets affected. As the demand reduces the businessmen becomes reluctant about investing more money. This is the time when government intervention is needed to boost up the economy.
Features of Keynesian Theory:
- Government intervention, especially fiscal policies are must to achieve full employment.
- This theory presumes that macroeconomics is a distinct entity with its own set of principles, which is different than microeconomics.
- It indicates that markets cannot achieve equilibrium by themselves. Which again means for full employment government intervention is must.
- This theory mainly describes unemployment problems , especially during depression.
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