Answer to Question #261064 in Macroeconomics for Robert

Question

Explain the implication of Keynesian and Monetarist theories to the Kenyan

economy.

Answer 1

The industrial terminology of demand-side economics is analogous to Keynesian economics. Keynesian economists strongly believe the economy is more suitable on controlling the demand for products/services, despite the fact, these economists you should not entirely ignore the role the money supply has inside the economy and on affecting GDP. They generally do, however, strongly believe it involves a myriad of time for the industrial market to pull to your monetary influence.

The fresh Keynesian theory arrived in the 1980s and develops some principles the classical theory did not, that include government intervention and additionally the behavior of prices. Each of the theories certainly are a response to depression economics. Monetarists are likely the money supply is the same thing that directs the economy. They believe that directing the amount of money directly influences inflation. Additionally, monetarists realize that by fighting inflation having the amount of money, they might influence interest someday.