a lesson on

Keynesian Economics

Origin of Keynesian Economics

Capitalism is inherently unstableIt has no natural tendency toward full employmentPeople acting in

their best interest won’t always help the economyGovernment should

stimulate the economyThrough public works spending

Y=C+I

Y=C+I+G

War Preparations begin

New Deal Begins

Roosevelt cuts back on stimulus

Monetarism has been tried in Great BritainIt sunk them into a deep recession

Keynesian Policy can cause too much debt

Conclusion