Deficits must be avoided revenue as gdp fell so must

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- Deficits must be avoided Revenue —> As GDP fell so must tax revenue 4) Net Exports —> Difference between exports and imports - Exports for domestic economies - And imports represent for foreign economies Exports minus imports equals net for the other economy Shrinking domestic incomes also have falling imports. - The net result is that capitalist economies are caught in a rut for which a self-regulating market does not have a solution. -Automatic response in which wages would fall leading to an equilibrium wage where mass unemployment would be removed. - Labour supply would all Labour demand would rise and unemployment will be removed. - Keynes focused on Government expenditure increase aggregate demand by din systematic way to increase consumer expenditure. -Increase expenditure through the multiplier effect which would increase income which increases employment and the cycle continues The government encourages deficit up to the point where full employment is reached - By full employment is meant that people cannot accept that they are forced to work and cannot find jobs -Keynesian economies provide an alternative explanation which gives the state or government. -Through change in fiscal plus monetary policy Keynesianism- Provided a new framework for understanding the role of the state should be in managing the economy. -Keynesianism became widely practiced after 1945> After WWII 1939-1945
- Canada —> In canada, in the crisis war, the crisis of the 1970’s was a period in which the economies of the major industrial countries of the world, particularly the United States, Canada, Western Europe, Japan, Australia, and New Zealand were heavily affected and faced substantial labour and raw material shortages, real and perceived, as well as elevated prices. Resulting in a transformation in the labour market, in which women were increasingly unemployed. In traditionally male dominated fields. - There was a fear that mass crisis conditions would return with the end of the war. This was combining Canada with the fear of social lessening. - The CCF party formed around 1930’s in the regina manifesto to nationalize the banks and transportation companies on nationwide. The CCF became increasingly popular in 1943 wit highest populated supporters. Later the NDP party, there main objective was to reconstruct socialism at that time. Once again, consensus emerged because business were not interested in going back to the 1930’s concept of Keynesianism which was later on proven a flawed solution. It became a popular theory in post-war capitalistic societies because it dealt with problems such as private business sectors and people. First tutorial + lecture Map Political Science Manuel Larrabure [email protected] Office: 610 Ross S 11:30 - 12:30 T -------------------------------------------- General formula for Capitalism Money-Commodity- M-C-P-C1-M1
| / \ MP LP \ Workers Means of Production-Labour power "Money" - Capitalist have money and without this first step there is no further process for the whole system.

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