Economics.docx - RUNNING HEAD ECONOMICS Title Students Name Course Institution Date Q 1 Classical v Keynesian Approaches The Keynesian theory assumption

Economics.docx - RUNNING HEAD ECONOMICS Title Students Name...

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RUNNING HEAD: ECONOMICSTitleStudent’s NameCourseInstitutionDate
Q 1: Classical v. Keynesian ApproachesThe Keynesian theory assumption is that during a recession the economic output of a country isgreatly influenced by the Aggregate demand as such the private sector operations create marketinefficiency that requires government intervention to stimulate aggregate demand and reduceunemployment. While the classical theory advocated for Contractionary policies since it's basedon the assumption that the market creates its own equilibrium without any interference from thegovernment either through spending or regulations. The classical approach advocated for thesupply side to create more wealth to sustain demand, however, if more people are paid lowwages and the unemployment rate is high, then the supply will surpass the demand resulting inan inequitable distribution of resources.In my opinion, the economy today requires more demand as such government intervention canstimulate this through the use of fiscal policies. For instance, to create more jobs in the petroleum

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