Worksheet 3 - Worksheet 3 Classical Model Keynesian...

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Worksheet 3– Classical Model, Keynesian Consumption Emily Leung ---- FRIDAY 10:10 1. What was the Classical Model Answer to the Great Depression? The classical model answer to the Great Depression was believed that at full employment there would be equilibrium. 2. Who is John Maynard Keynes? John Maynard Keynes was a British economist who believed that the government should use fiscal and monetary measures to alleviate the effects of business cycles, economic depression and recessions. Following WWII, Keynes ideas were adopted throughout many other Western economies. 3. What is equilibrium to Classical Economists? What is different about it for Keynes? Classical economists believed that equilibrium was when there was full employment; however, Keynes believed that equilibrium might or might not be at full employment. 4. What are Leakages and Injections…why are they important to Keynes? Leakages are the money not spent, such as savings, taxes, and imports.
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This note was uploaded on 10/19/2011 for the course ECON 104 taught by Professor Dolenc during the Spring '08 term at UMass (Amherst).

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Worksheet 3 - Worksheet 3 Classical Model Keynesian...

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