Keynesian Economics

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…ultimately result in a government budget deficit where the total government expenditures exceed the total government revenues. By shifting the aggregate demand, the equilibrium level of aggregate output and employment would rise. Keynesian economics flourished and ultimately brought the nation out of the Great Depression. It encouraged full employment and price stability. Unfortunately, prices are not stable for long periods of time and as inflation increases the Keynesian model applies less and less. ------------------------------------------------------------------------ **Bibliography**