Unformatted text preview: policy and government expenditure. They held a simple belief: "That government is best which taxes the least or which spends the least." This is because they were of the view that government spending causes unnecessary intervention in private economic activities. They believed that the free enterprise system is a self-equilibrating one and public intervention will only cause disturbances in its smooth working. But Keynes opposed such a view. He pointed out that throughout the 19 th century, western free enterprise economies have suffered frequent problems of cyclical fluctuation . The recent experience during the Great Depression (1929-33) is a flagrant example of it. During the Depression, output and employment levels fell by 40 percent for a prolonged time....
View Full Document
This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.
- Fall '10
- Fiscal Policy