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Keynesian economics was developed by the (British economist) John Maynard Keynes during the 1930s. It explains the total economy and these effects on output. The world economy was developed by this method. This method concentrate on the improve government expenditures and reduce the submission of taxes. By the usage of this method (Keynesian economics) optimal economic performance can be achieved. The problems are arises in world economy can be overcome by application of this method. Keynesian economics is considered to be a “demand-side” theory that focuses on the changes in economy. Keynes's theory explain about the mainstream thought of the time and also greater awareness regarding structural inadequacies: Some problems like unemployment. For example: These are not viewed as a result of moral deficiencies like laziness. The imbalances in demand and whether the economy was improve or reduce. There no guarente to attain the goods demand. The economy can not maintain itself by employment it was necessary for government to stop expenditures and under utilized savings to work through government spending. According to Keynesian theory, some individually are not investing savings which are produced by economy in the goods and services. Due to collectively all individuals and firms are participate economy operate at below its productive level. Before Keynesian theory the demand for goods and services are not matched. This is described by classical economists as a general glut. Keynes said that when a glut occurred, it was the higher reaction of producers and the lower reaction of workers that led to a fall in demand and perpetuated the problem. Keynesians theory is active a stabilization policy to reduce the amplitude of the business cycle. This theory is helpful for ranking the most serious of economic problems. According to the Keynesian theory the government can spend to increase aggregate demand leads to increase economy activity and reducing the unemployment.
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