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Unformatted text preview: Reading Study Guide The Reconstruction of the Global Economy, 229-241, 253-300 1. What was social democracy? Social democracy was a new social and political order. How did the Swedish and American versions of social democracy compare ? (pp. 230-236) Sweden used a countercyclical demand management, government commitment to alleviate the business cycle. They used monetary policy to keep prices from falling and fiscal policy to sustain economic activity. The 2nd pillar of Swedish social democracy was social insurance. America was taken off gold and devalued, which helped recovery, also relied on the New Deal. What was/is Keynesianism? Keynesianism is an argument for government to assume major fiscal tasks. What was Keyness principal contribution to the economic debates of the time? (pp. 237-241) Keynes principal contribution to economic debates of the time had to do with fiscal policy. He argued that deficit spending was essential to reactivate stagnant economics. Basically, only government spending could set our trapped economy spending was essential to reactivate stagnant economics....
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- Spring '09