Keynesian economics

If the economy is heading into a recession, the fastest, however not the most effective, way to deal with it is for the Federal Reserve to use expansionary monetary policy. Expansionary monetary policy is not the most effective way to deal with this issue because it does not directly impact the amount of spending in the economy directly as expansionary fiscal policy does, however, given that the economy is not embroiled in the recession, but is heading into one, this policy is the fastest way to…

minister has advisors to help him or her make the correct decision every time. An economic advisor for the government must have a thorough understanding of effects decisions will have on the economy. One mistake can worsen recessions to the point of depression or dampen a strong economy. In the United States, every President is graded a success or failure in large part due to the success or failure of the economic strategies employed. Advisors to the government must know how to manipulate…

mixed economy or a traditional economy for their economic growth and survival. The documentary “Commanding Heights: The Agony of Reform” directed by Daniel Yergin and article “Forget Adam Smith. Whatever Works,” written by Pete Engardio are two media examples that discuss how economies struggle with too much or too little government intervention. Through reasonable regulation of businesses and financial planning/management, they can solve their economic problems for the future and have more…

Budgeting is one of the most important planning process in personal finance, they forecast future incomes and expenditures in the light of past experience. How they blend into our everyday life and how they help us to make wise decisions is the question I will try to answer in next few rows. a. What financial tools described in this chapter can help you make better financial decisions? Creating various budgets and reviewing financial history and predicting future are all tools that can help…

The book defines the fiscal policy as the management of the federal budget to achieve price stability, full employment, and a satisfactory rate of economic growth. Chapter 8 discusses ways to attain these goals, such as controlling its spending levels and taxes. The fiscal policy was invented by a theorist, Maynard Keynes; in the 1930s during the great depression. The suggestion Keynes made was for the government to spend money, his suggestion worked and got America out of the depression during…

be what is called a negative multiplier, which would increase the deficit by even more as there would be more government aid needed. So the government must borrow, and usually from foreign countries. The borrowed money can be allocated to spur economic growth. For example, if the government uses the money to create an infrastructure, then there will be an increase in employment of the labor force. Thus, more money will flow back into the economy, which would create an increase in business…

Nowadays, Australia is facing two crucial economic issues, which are increasing the budget deficit and house affordability. In a long term, those two issues can deteriorate the economy that has been in slow growth in the last three years. First, the increasing budget deficit affects an increase in the Australian debt, which deteriorates the economic growth. Second, as the housing prices are significantly overvalued, the Australian economy grows slowly. (In order to solve the rise in budget…

“How many economists does it take to change a light bulb? None. If the light bulb needed changing the market would have already done it.”-Any website with economic jokes. However, the method that the market is being measured is not the best or the only way to measure progress of a country. Page 200 of Naked Economics quotes, “Any measure of economic progress depends on how you define progress. GDP just adds up the numbers. There is something to be said for that.” I believe that the narrator is…

current consumption in lieu of saving. Because of this, many commentators such as high officials of the Bank of Canada have attributed the high interest rates to Canadians’ spending habits. To validate this assertion, it is important to understand the economic model called the market for loanable funds, the government policies that can encourage the increase of the economy’s investment and saving, and finally…

In this thirty-minute-long video, Dalio in a very simplistic way explains what is an economy, how it works and the main factors that are involved. He begun by defining the economy as a machine that is kept working by the transactions between governments, businesses and singular people. These transactions happen in a market, where money or credit is exchanged for goods, services or financial assets. The biggest buyer and seller of the market, the government, is divided in two parts: the central…