Friedman vs. Keynes
Everybody knows that economics is simply defined as the study and understanding of the economy, including the system of government, the people, and anything else that deals with money and all financial matters. When people discuss economics, some of them prefer to split it into two separate branches which are microeconomics and macroeconomics. Microeconomics is the branch that reviews the market’s act specifically for individuals hoping to understand how they make decision for their household. On the other hand, Macroeconomics is the branch that examines and deals with the structure, performance, and the behavior of the national economy. Macroeconomic also focuses on international trade, changes in unemployment, national …show more content…
His father was a philosopher and also an economist. His mother was the town’s first female mayor. He was the head of the school, excelling in mathematics until he grew up and won a scholarship to attend Eton College. He showed great talent there in all the subjects he studied, especially mathematics. Then he joined Cambridge University and graduated in 1904 with a B.A in mathematics. After graduating, Keynes went straight to work, but in 1908 he quit his job and returned to Cambridge University. Following the burst of World War One, after attending the conference of the Versailles peace treaty, he published a book called “The Economic Consequences of the Peace” in which he criticized how the reparation that was expected from defeated Germany is unfair and also predicted that it would encourage a desire for revenge from the German people. However, this best-selling book was very popular and opened people’s eyes everywhere in the world which made him very famous worldwide. The Keynesian economic theory simply eliminates that the economy is always going in cycles of rapid economic expansions followed by a bust where the rate of unemployment rises and businesses reduces productivity. His solution for this issue was simply the government should give money to the economy during the busts time, even if it will cost the government to go into debt, to increase the employment and productivity. Furthermore, during the time when the economy is expanding he advised the government to reduce its participation by cutting spending and raising taxes. Based on this idea the Federal Reserve would control the money supply by lowering or increasing interest rates. In addition, congress would also control taxation and government spending to keep high employment
Everybody knows that economics is simply defined as the study and understanding of the economy, including the system of government, the people, and anything else that deals with money and all financial matters. When people discuss economics, some of them prefer to split it into two separate branches which are microeconomics and macroeconomics. Microeconomics is the branch that reviews the market’s act specifically for individuals hoping to understand how they make decision for their household. On the other hand, Macroeconomics is the branch that examines and deals with the structure, performance, and the behavior of the national economy. Macroeconomic also focuses on international trade, changes in unemployment, national …show more content…
His father was a philosopher and also an economist. His mother was the town’s first female mayor. He was the head of the school, excelling in mathematics until he grew up and won a scholarship to attend Eton College. He showed great talent there in all the subjects he studied, especially mathematics. Then he joined Cambridge University and graduated in 1904 with a B.A in mathematics. After graduating, Keynes went straight to work, but in 1908 he quit his job and returned to Cambridge University. Following the burst of World War One, after attending the conference of the Versailles peace treaty, he published a book called “The Economic Consequences of the Peace” in which he criticized how the reparation that was expected from defeated Germany is unfair and also predicted that it would encourage a desire for revenge from the German people. However, this best-selling book was very popular and opened people’s eyes everywhere in the world which made him very famous worldwide. The Keynesian economic theory simply eliminates that the economy is always going in cycles of rapid economic expansions followed by a bust where the rate of unemployment rises and businesses reduces productivity. His solution for this issue was simply the government should give money to the economy during the busts time, even if it will cost the government to go into debt, to increase the employment and productivity. Furthermore, during the time when the economy is expanding he advised the government to reduce its participation by cutting spending and raising taxes. Based on this idea the Federal Reserve would control the money supply by lowering or increasing interest rates. In addition, congress would also control taxation and government spending to keep high employment