Economic History

Running Head : ECONOMIC HISTORYEconomic History : Answers to Questions[Author][Affiliation][Date]Economic History : Answers to QuestionsA ) prune what Keynes thought were the pros and cons of the active use of financial insurance and of pecuniary policy to stabilize an prudence (3 pointsAccording to Keynes , recessions and financial crises can be avoided if central banks maintain general equilibrium in the bills markets (via fiscal policy . It can reduce money offer by selling bonds . It can subjoin money total by buying bonds . This affix- shine in money supply is a general instrument utilized by central banks to figure the robustness of the financial market . In short , the angle of inclination of the policy is to make the prices of financial assets stable (prevents panic .

Keynes unless , argued that financial policy does not raise the national income pecuniary policy only creates an illusion of economic prosperityKeynes favored the use of fiscal policy in increasing the level of national income because of both major reasons . First , fiscal policies be easier to implement than monetary policies . A presidential term can increase or slump its expenditure level depending on the status of the prudence If an economy is in recession , then the government can increase its level of expenditure . If actual gross domestic harvest-home exceeds potential GDP , then a slight decrease in government spending is necessary . Not e that the mechanism by which fiscal policie! s are implemented are such(prenominal) less civilize than that of implementing monetary policies . Second , the effects of fiscal policy are more pronounced than that of...If you want to get a full essay, consecrate it on our website: OrderCustomPaper.com

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