Keynes idea seemed very different and at the time and Keynes was considered a socialist. Keynes in actuality was not a socialist, but he was trying to make sure that the people had enough money to save the economy. The Supply Side economics also known to many as Reaganomics was introduced during the Regan administration. Supply Side economics stresses the influence of taxation on the economy. Supply Side is a school of economics that believes tax cuts can help an economy by raising supply.
"Propaganda in a Democracy." Dennis Lewis. WordPress, n.d. Web. 08 Dec. 2013.
This will let the rich people are getting more richer and poor are becoming poorer. Next, the economic develop rapidly also will increase of pollution rate. This is because the country is producing the maximum output for fulfilling the demand of the consumer. This will let the country has negative consequences for the environment and health of citizens is
After a downturn, greater government wasting can easily activate business action, create work as well as spur buyer wasting. This specific produces some sort of multiplier result by which $1 involving government wasting facilitates boost GDP by over $1(economicsonline). Several protest that this negative result involving debts wasting is usually that rates of interest increase as the government borrows additional. The larger prices help make asking for income costlier which enables it to stop increase. Deficit spending ensures that you will be borrowing money right this moment that will you will need to pay off in the foreseeable future.
As a result of this economic growth families will begin to feel more confident and will begin to spend more of their money instead of saving it because they believe that will receive a pay raise or will find a better job. (Amadeo, 2016) Borrowing also increases when economic activity is high people begin to borrow from banks and other places because they feel that the government has been doing a great job managing the economy. (Amadeo, 2016) As we have seen in 2008 people should never get to confident in the economy because our economic bubbles are used to crashing when they are doing very well and it’s never really the people’s fault it’s the governments. Although inflation begins to rise when the economy is doing great one of the things that is known to bring prices down is competition among businesses. Competition is great because one company will attempt to sell a product for a cheaper price than another company which results in lower prices the same as you see with cell phones and automobiles.
If the economy is in recession, then the tax credit and tax cuts will increase the disposable income and thus increase the overall production of the economy. It will help in recovery of the economy. But one has to take care that increase in the disposable income should not be wasted on the conspicuous expenditure but utilized for the essential consumption expenditure. Then only it can lead to increase in the employment, which will lead to increase in real growth in national income. If the economy is overheated then the reverse strategy can be employed.
The entrepreneur was born in a rich family and now he has invested his money on this firm. The workers gain more benefit if they work harder but the great benefit comes to entrepreneur who had invested money. So the entrepreneur will be richer faster than other workers and the gap between workers and entrepreneurs is getting greater, so one part of population that has muc... ... middle of paper ... ... be more than someone else that has master degree. This inequality in income sometimes exists and policy makers always try to solve it. Is government intervention inevitable and beneficial?