Economic History

Running Head : ECONOMIC HISTORYEconomic History : Answers to Questions[Author][Affiliation][Date]Economic History : Answers to QuestionsA ) free what Keynes thought were the pros and cons of the active use of financial constitution and of pecuniary constitution to stabilize an prudence (3 pointsAccording to Keynes , recessions and financial crises can be avoided if central banks maintain general equilibrium in the bills markets (via monetary policy . It can reduce money offer by selling bonds . It can subjoin money total by buying bonds . This attach- shine in money supply is a general machine utilized by central banks to fork out the robustness of the financial market . In short , the intent of the policy is to make the prices of financial assets stable (prevents panic .

Keynes unless , argued that monetary policy does not raise the national income pecuniary policy only creates an illusion of economic prosperityKeynes favored the use of fiscal policy in increasing the level of national income because of both major reasons . First , fiscal policies be easier to implement than monetary policies . A presidential term can increase or return its expenditure level depending on the status of the thrift If an economy is in recession , then the government can increase its level of expenditure . If actual gross domestic carrefour exceeds potential GDP , then a slight belittle in government spending is necessary . Note that the mechanism by which fiscal policies are ! implemented are ofttimes less civilize than that of implementing monetary policies . Second , the effects of fiscal policy are more pronounced than that of...If you want to get a full essay, consecrate it on our website: OrderCustomPaper.com

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