Economic History

Running Head : ECONOMIC HISTORYEconomic History : Answers to Questions[Author][Affiliation][Date]Economic History : Answers to QuestionsA ) apologise what Keynes thought were the pros and cons of the active use of financial policy and of monetary policy to stabilize an deliverance (3 pointsAccording to Keynes , recessions and financial crises can be avoided if central banks maintain general equilibrium in the chance on markets (via fiscal policy . It can reduce capital retain out by selling bonds . It can improver money furnish by buying bonds . This augment- devolve in money supply is a general mechanism utilized by central banks to tick the robustness of the financial market . In short , the account of the policy is to make the prices of financial assets immutable (prevents panic .

Keynes merely , argued that monetary policy does not prove the national income pecuniary policy only creates an illusion of economic prosperityKeynes successful the use of fiscal policy in increasing the train of national income because of deuce major reasons . First , fiscal policies ar easier to implement than monetary policies . A regimen can increase or decrease its expenditure level depending on the locating of the economy If an economy is in recession , then the disposal can increase its level of expenditure . If actual pure(a) domestic product exceeds potential GDP , then a slight decrease in government spending is required . Note that the mechanism by which fiscal policies are enf! orced are much less cultivate than that of implementing monetary policies . indorse , the effects of fiscal policy are more pronounced than that of...If you require to get a full essay, cabaret it on our website: OrderCustomPaper.com

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