Answer to Question #189380 in Macroeconomics for Jack

Question

Macroeconomics equips you with the necessary skills to become economic policy makers. As economic policy makers, you need to understand macroeconomic fluctuations and the roles of monetary and fiscal policies in managing the economy.

You are required to select an article from printed or online media on any stricken economy.

The article must have been written after June 1, 2019. A copy of the article showing date and source is to be attached with the assignment as appendix.

You are to critically apply Keynesian economics to fix the economic problem.

Diagram must be well labeled.

The assignment should include:

• Why were Keynesian ideas revolutionary?

• What economic problems in your news article that require government intervention?

• How the economic problems would be approached by Keynesian economists?

• Do you have faith that this intervention will be effective?

• How have the economists’ views on Keynesian economics changed over time?

• Is Keynesian economics dead today?

Answer 1

.Why the keynesian ideas were revolutionary

Keynesian economics is centered on the demand side solutions to recessionary periods.

Itillustrates that economics can remain stuck in underemployment equilibrium. It holds that all commodity markets inclusive of labor, are simultaneously cleared by prices. This implies that governments may consider running deficits to achieve full employment.

.What economic problems in your news article that require government intervention?

The economic problems were unemployment, underemployment and low economic demand.

• How the economic problems would be approached by Keynesian economists?

The keynesian economists would lower interest rates to stimulate the economic cycle by motivating businesses and individuals to borrow more money. The borrowed money would then be spent stimulating the economy. However, lowering interest rates does not always directly lead to economic improvement.

• Do you have faith that this intervention will be effective?

I believe the intervention would be effective in the short run but not in the long run. This is because most economies stabilize themselves slowly and may require rapid intervention to boosts short-termeconomy demand.

• How have the economists’ views on Keynesian economics changed over time?

Owing to the fact that unemployment rate is still high, most economists and policy makers have continued to gradually discredit the keynesian economics and have reservations about the keynesian theory.

Is Keynesian economics dead today?

Even though Keynesian economics is present today it is dormant. However, in some instances for example COVID-19 pandemic, the Keynesian economics has been actively applied.Keynesian economics basic understanding of deficits dictates that the surpluses have to be run in good times, and deficits in bad times.

The copy of the article can be found by use of the URL below. It is dated 25 mar 2021.
https://www.masterclass.com/articles/what-is-keynesian-economics-definition-history-and-real-world-examples-of-keynesian-economics