Question

13. Government spending could be used to _____________, ___________, and _______________.

14. According to Keynes, reigning in government spending does not work because it always?

15. Explain in full detail, how does Keynes' MULTIPLIER effect work?

16. Which of Keynes' other proposals were implemented at the Bretton Woods Conference at the end of WWII?

17. Keynes' policies were adopted across the _____________ world & saw _______________________.

Answer 1

13-Government spending could be used to National defence, Infrastructure & investment, and Healthcare & Medical research .

14-According to Keynes, regning in government spending does not work it is because of the demand to be the driving frce in an economy and argues that government should takes action, such as spending money and cutting taxes to stimulate the economic.

15- Keynes multiplier effect work is because according to this theory, the net effect is greater than the dollar amount spent by the government. This theory states that the economy will flourish the more the government spend.The multiplier effect refers to the increase in final income arising from a new injection of spending.The concept of multiplier occupies an important place in Keynes theory of income,output,and employment.Keynes believed that the initial increment in investment increases the final income in many times.

16-Keynes proposed having a maximum overdraft of half the average trade size over five years. If a country went over that ,it would be charged intrest,obliging a country to reduce its currency value and prevent capital exports.But countries with trade surpluses would also be charged intrest 10% if their surplus was more than half the size of permitted overdraft,obliging them to increase their currency values and export more capital.The IMF as agreed to at Bretton Woods much closer to white proposal than to Keynes.

17-Keynes' policies were adopted across the western industralized world & saw economic growth.