Copy of M3.L2_ History of the Economies and Economic Theories.pptx

02 Economic theories John maynard keynes ● Unemployment happens when people don’t spend enough – demand ● In recessions, demand goes down because people don’t have as much money ● Lower spending leads to even less demand and more job losses, etc. ● Economies need help from government ● Trying to...

02 Economic theories John maynard keynes ● Unemployment happens when people don’t spend enough – demand ● In recessions, demand goes down because people don’t have as much money ● Lower spending leads to even less demand and more job losses, etc. ● Economies need help from government ● Trying to balance the budget (spending = revenue) during a John maynard keynes ● In a market downturn, government should borrow money and spend it to boost the economy ● Create government sponsored jobs and public works to get people employed again ● Products of that economic growth can then be used to repay debts ● In brief, government should play a MAJOR role in economic management ● Full employment and prosperity could only be maintained with the help of government spending FRIEDRICH A. HAYEK AND MILTON FRIEDMAN Hayek: ● Central planning (communist and socialist governments) not good at making economic decisions ● Less government meant more freedom ● When people are free to choose, competition would lead to a healthy market Friedman: ● Government fine tuning wouldn’t work because the economy was too complex ● Government not skilled enough to fine tune Keynesian Economics We’re done! Complete your Google Doc by the end of the class. CREDITS: This presentation template was created by Slidesgo, including icons by Flaticon, infographics & images by Freepik Please keep this slide for attribution