Why Does Keynesian Economics Advocate Government Spending During A Recession?

The premise that the macroeconomy can be in disequilibrium (recession) for a long time is central to Keynesian economics. To help an economy recover from a slump, Keynesian economics supports more government expenditure (funded by government borrowing) to jumpstart it. Keynesian economics includes Individuals save more during a recession, but this deepens the economic crisis).

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How Is GDP Determined?

Gross domestic product (GDP) equals private consumption + gross private investment + government investment + government spending + (exports Minus imports). GDP is usually computed using international standards by the country’s official statistical agency. GDP is calculated in the United States by the Bureau of Economic Analysis, which is part of the Commerce Department. The

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