Keynesian

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Identify a period in history when any government in the world applied Keynesian economic methods in trying to stimulate their economy. (Do not use the Great Depression as an example). Address the following:

1. Identify and describe the Keynesian actions.
Keynesian economics is centered around the premise that governments should play an active role in promoting economic policy and regulating the private sector. Increased government spending and deficits will increase demand in the economy for more production, and that producers will increase supply to meet that demand, hiring more workers and reducing unemployment in the process. President Obama used a stimulus package of nearly $ 1 trillion using the rationale that it would cause the unemployment rate in America to drop to 5.8% and never exceed 8%. As of May of this year, the unemployment rate is at 8.2% and barely moving. The rate has exceeded 8% for 41 straight months as of May. Prior to the recession of 2008 unemployment had not measured over 8% in America since Dec. 1983. Not included in the 8.2% quoted unemployment rate is the estimated 7.2 million people who have given up looking for work or the 8.2 million underemployed workers (part time because they cannot find a full time job). If these two factors were included in the unemployment, it would be 22.8%. Unemployment rate: 8.2% Unemployed + underemployed: 14.9% Unemployed + underemployed + long-term discouraged workers: 22.8%
In 2011, the economy grew at a rate of 1.7% which is about half of the historical growth rate long-term. The census bureau reported that American’s real wages have decreased during this time period and more Americans are classified as in poverty than at anytime since the census bureau has been tracking poverty.

2. Explain why the government chose to apply these measures. 3. Analyze the results of…...

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