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economy

The economy was once new and beliefs varied a little from the beliefs of the twentieth century. These beliefs were created in the 1500's and were considered Classical Economist beliefs. These beliefs went on for three hundred and fifty years and were followed as a standard for that time period. Once the knowledge of John Manard Keynes was into looking, the great depression ended. For nearly ten years this country experienced a high rate of unemployment. This happened during the downfall of the American economy in the late 1920's. John Manard Keynes noticed the economy should be changed in order for the depression to be ended. He created the Keynesian Economist beliefs. These beliefs are in stability and have kept the economy on a steady pulsation upwards. The beliefs between Classical and Kenesian models are somewhat reciprocals to each other. Classical Economist included John Baptiste Say, Adam Smith and David Ricardo. John Baptiste Say wrote "supply creates it's own demand" and was considered Say's Law in the 1600's. Adam Smith wrote "The Wealth of Nations" and this publication dealt with America's Income and Savings. Finally, David Ricardo created the "Theory of Comparative Advantages. These Economists were great


The economy was unstable due to a great depression that occurred in the 1930's. This was a time were the economy was unstable with a 25% unemployment rate. This was in definite a need to change. Kenesian models set forth to create a stable economy that would never reach another depression. His theories took America to higher levels after the 1940's.

Keynesian model because it can correct the recession quicker than if your economy is

"StickyaE? wages support the economist belief because the flexibility of reducing wages is not allowed. Upward flexibility can only occur. Also the economy is looked at in a short run perspective in order to prevent a deep recession. Short run perspective is important to the



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Approximate Word count = 1026
Approximate Pages = 4 (250 words per page double spaced)


  

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