Keynes

Summary Keynes held different views from previous classical economists on an entrepreneur economy. In the classical theory, an entrepreneur economy was considered acting in the analogous way as a co-operative economy, whereas Keynes thought not (Keynes 1932: 67-68). In a co-operative economy, an entrepreneur focused on how much survey of the output exceeded the costs (Keynes 1932: 67), and was willing to offer more recitation only if the expectation showed that he would obtain more criterion of product for himself (Keynes 1933a: 82). In this case, the difference between the sale final payment and variable cost was fixed. Thus the fluctuations of effective demand had no impact on the volume of employment (Keynes 1933a: 80). In an entrepreneur economy, since an entrepreneur was interested in the amount of coin as his returns, his decision about whether to offer more employment or not depended on which would yield the largest profit in harm of money for him (Keynes 1933a: 82). Therefore, the fluctuations of effective demand played a spot role in determining the volume of employment (Keynes 1933a: 80). Keynes as well disagreed with the idea of the classical economists that supply created its own demand. If it was the truth, entrepreneurs would never project a loss (Keynes 1933a: 81).

However, since not all the income would be consumed, entrepreneurs had to conclude the proportions for investment and consumption (Keynes 1937: 120). Thus Keynes suggested that expenditure created its own income (Keynes 1933a: 81). An entrepreneur economy always concerned more about money. coin was an ultimate means of remuneration in an entrepreneur economy, which avoided losses of keeping finished goods due to charges for storage, risk and deterioration. The use of money also affected the fluctuations in effective demand (Keynes 1933a: 86). Keynes explained the consanguinity between the propensity to hoard and interest rate by the concept of liquidity preference. He pointed out that when the... If you want to withdraw a full essay, order it on our website: Orderessay

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