Andrea thinks that individual citizens, rather than the government, should answer the basic economic questions; however, she feels that government should prevent large changes in the economy. Her ideas are based on which economists?

Question

Damari

Social Studies

12 April, 20:17

Andrea thinks that individual citizens, rather than the government, should answer the basic economic questions; however, she feels that government should prevent large changes in the economy. Her ideas are based on which economists?

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Answers (1)

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Delilah Sweeney · Answer 1

Her ideas are based on the ideas of British economist John Maynard Keynes, and other Keynesian economists such as Paul Krugman and Paul Samuelson.

Explanation:

Keynes defended a market economic system where individuals and firms made the majority of economic decisions. He was opposed to the central planning that was applied in communist and socialist countries.

However, Keynes believed that the nature of a market economy was that it was prone to business cycles: periods of growth followed by periods of recession, and that the function of the government was to use economic policy to balance those cycles.

For example, if the economy was declining, and unemployment was high, Keynes recommended that governments should inject money into the economy in order to promote more demand for goods and services, and more employment.