Econ 2DO3#2 - Econ 2DO3 Assignment#2 John Maynard Keynes(a Main contribution John Maynard Keynes was a British economist best known for spearheading the

Econ 2DO3#2 - Econ 2DO3 Assignment#2 John Maynard Keynes(a...

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Econ 2DO3 Assignment #2 John Maynard Keynes (a) Main contribution John Maynard Keynes was a British economist best known for spearheading the revolution in economic thinking. His major contribution to the world of economics is the Keynesian theory of economics which claims that productive activity is controlled by the aggregate demand. His ideas have overwhelmingly affected the concept and practice of contemporary macroeconomics, and
informed the economic policies of administrations. He is writing definitive works explaining how competitive markets functioned, how businesses operated, and how individuals spent their incomes. (b) How it shaped economic analysis? Keynes stated that if Investment exceeds saving, there will be inflation. If saving exceeds Investment there will be recession. One implication of this is that, in the midst of an economic depression, the correct course of action should be to encourage spending and discourage saving. This runs contrary to the prevailing wisdom, which says that thrift is required in hard times. In Keynes's words,

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