Only a big government that was spending on behalf of the people would be able to guarantee full employment and economic prosperity. Even when forced to rework his model to allow for some private investment, he argued that it wasn't as efficient as government spending because private investors would be less likely to undertake/overpay for unnecessary works in hard economic times" (Beattie 2010)
"Keynesians believe that what is true about the short run cannot necessarily be inferred from what must happen in the long run, and we live in the short run. They often quote Keynes's famous statement, 'In the long run, we are all dead'" (Blinder 2008)
Adding to the problem was that the United States was still on the gold standard, which meant that the amount of money it could print was limited by its amount of gold reserves. The Federal Reserve was forced to adopt a deflationary economic policy to remain on the gold standard: to be fiscally responsible it increased its discount rate, the rate at which member banks could borrow from the central bank, effectively raising the interest rate the banks were forced to charge to consumers (Smiley 2008)
Keynesianism offered an explanation of why the economy could not 'naturally' pull itself out of a recession or depression, and why the classical, 'hands off' solution of allowing the invisible forces of the market to correct itself could not fully explain all of the business cycle. Keynesians believed "that prices and, especially, wages respond slowly to changes in supply and demand, resulting in shortages and surpluses, especially of labor" (Blinder, 1999)
The Chicago School is based in a belief that people are rational beings and are very good at working out what is in their best long-term interest, unlike Keynesian theory that proposes that short-term personal decisions like hoarding may seem rational but could actually be irrational in the 'macro' scheme of things. (Klemens, 2003: 2)
This is significant, because it is a sign that various protectionist policies are ineffective at addressing the underlying challenges facing the nation. ("Hawley Smoot Tariff," 2011) (Griswold, 1998) Clearly, Keynesian economic policies can stabilize the economy
This will improve business confidence leading to increases in hiring and other activities. (Lipsey, 2007) Under the post war philosophy, the economy and unemployment may not respond so quickly to massive public expenditures
This led to a rise in the trade deficit because of the increase in demand for these products. (MacEnzie, 2011) Analyze the arguments for protectionist policies and the effect, if any, upon the trade deficit
This will help to increase tax revenues, which is going to reduce the trade deficit by providing the government with greater amounts of income that it is receiving. (Roubini, 1997) Evaluate recent national economic policies as they relate to the magnitude of the trade deficit The massive amounts of government spending in the form of various bailout programs were effective at heading off the recession
The same demand law that works for entertainment, clothing, automobiles, and other services and goods also applies here; movements along this demand curve take place with respect to consumer responses to price changes in obesity-related care services. It is assumed that healthcare, which includes doctor visits, hospital bills, medication, and other health services, are measurable in healthcare units (Bovbjerg, Dorn, Hadley, Holahan and Miller, 2006)
S., in the next decade, is projected to spend more than 343 billion dollars on obesity-linked healthcare costs, if obesity rates continue rising at the present level (Finkelstein et al
Medicaid and Medicare). While movements are caused along the obesity-linked healthcare demand curve due to price changes, other factors may also contribute to shifts in demand curve (Manning, Newhouse, Duan, Keeler, Leibowitz, & Marquis, 2007)