ECON 360-5 - 1) Keynes argues that a justification for...

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1) Keynes argues that a justification for inequality of incomes is not equally applied to inequality of inheritances. Because wealth is often impeded by the rich, it affects the attitudes people have towards their provision. This balance between the want for wealth and the rich creates a gap, therefore causing social and psychological justification for inequalities of income and wealth. Keynes proves this falsity by examining human nature and their “money making passion”. Another justification of inequality examined by Keynes is for the high rate of interest which in turn, creates an incentive to save. However, Keynes proves that the level of saving is only acquired through the scale of investment, which is provided at a low rate of interest. Therefore, it is to our best advantage that the interest rate be reduced to the point of marginal efficiency of capital at the point where full employment can be attained. 2)
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This note was uploaded on 05/16/2008 for the course ECON 360 taught by Professor Campbell during the Spring '08 term at SUNY Potsdam.

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ECON 360-5 - 1) Keynes argues that a justification for...

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