Answer to Question #214516 in Macroeconomics for INGRID

Question

Essay on the keynesian theory of unemployment.

Answer 1

The theory describes unemployment as a result of lacking effectual demand for services and goods which people may have produced. Utilization of fiscal or monetary policy in enhancing effectual demand may assist in minimizing Keynesian unemployment. Classical unemployment tends to be distinguished from Keynesian unemployment, in which wage rates tend to be excessively high compared to productivity to make employment profitable, as well as structural unemployment, in which unemployed tends to be lacking techniques required by employers or companies are not having required tools to handle more workforce.