TAILIEUCHUNG - Economics and Liberating Theory - Part 6

6 Macro Economics: Aggregate Demand as Leading Lady Before the Great Depression of the 1930s there was only “economic theory.” Thanks to the Great Depression and John Maynard Keynes we now have “micro economics” and “macro economics.” | 6 Macro Economics Aggregate Demand as Leading Lady Before the Great Depression of the 1930s there was only economic theory. Thanks to the Great Depression and John Maynard Keynes we now have micro economics and macro economics. Economic theory bifurcated because some in the mainstream of the profession finally recognized that standard economic theory shed little light on either the cause of or cure for the Great Depression. The old theory was relabeled micro economics and preserved as the centerpiece of the traditional paradigm and a new theory called macro economics was created to explain the causes and remedies for unemployment and inflation. The leading lady in Keynes new drama was aggregate demand the demand for all final goods and services in general. By focusing on aggregated demand Keynes not only was able to explain why economic downturns can be self-reinforcing he was able to explain demand pull inflation and how government fiscal and monetary policies could be used to combat unemployment and inflation. Short run macro economics can be understood using one new law one truism and simple theories of household consumption and business investment behavior. THE MACRO LAW OF SUPPLY AND DEMAND The new law is the macro law of supply and demand. It is the macro analogue of the micro law of supply and demand which is the key to understanding how markets for particular goods and services work. The macro law of supply and demand is the key to understanding how much goods and services in general the economy will produce that is whether we will employ our available resources fully and produce up to our potential or we will have unemployed labor resources and factory capacity and consequently produce less than we are capable of. The macro law of supply and demand is also the key to understanding whether or not we will have 128 Macro Economics 129 inflation because the demand for goods and services in general exceeds the supply of goods and services the economy is capable

TỪ KHÓA LIÊN QUAN
TAILIEUCHUNG - Chia sẻ tài liệu không giới hạn
Địa chỉ : 444 Hoang Hoa Tham, Hanoi, Viet Nam
Website : tailieuchung.com
Email : tailieuchung20@gmail.com
Tailieuchung.com là thư viện tài liệu trực tuyến, nơi chia sẽ trao đổi hàng triệu tài liệu như luận văn đồ án, sách, giáo trình, đề thi.
Chúng tôi không chịu trách nhiệm liên quan đến các vấn đề bản quyền nội dung tài liệu được thành viên tự nguyện đăng tải lên, nếu phát hiện thấy tài liệu xấu hoặc tài liệu có bản quyền xin hãy email cho chúng tôi.
Đã phát hiện trình chặn quảng cáo AdBlock
Trang web này phụ thuộc vào doanh thu từ số lần hiển thị quảng cáo để tồn tại. Vui lòng tắt trình chặn quảng cáo của bạn hoặc tạm dừng tính năng chặn quảng cáo cho trang web này.