John Maynard Keynes s Law Starting With Aggregate Demand...

â€Å"There is no inherent reason to believe that investment outlays plus consumption outlays would always tend to equal the cost of any given output; there is no assurance that Demand would tend to equal any given Supply† In order to discuss the statement in the title, I will first talk about J. M. Keynes and give some general information regarding his life and career. Following I will discuss about Keynes criticism of Say’s Law starting with Aggregate Demand and how consumption together with investment are in relation to income. Afterwards I will highlight the role of investment and what the policy implications are. For the final part of this essay I will conclude with some evidence to support the claims made. John Maynard Keynes was born in 5th of June 1883 and died at the age of 62 on the 21st of April 1946. His work in economics and his ideas fundamentally changed the practice and theory of modern macroeconomics as well as the economic policies of governments. Keynes is very well known for his exceptional work on the implications and causes of the business cycles and is also regarded as the founder of modern macroeconomics. The school of thought also known as ‘Keynesian economicsâ₠¬â„¢ as well as the various offshoots have his ideas as foundation. Keynes initiated a revolution in economic thinking by challenging the beliefs that neoclassical economists held. He argued that their ideas that free markets would naturally provide full employment in the short to medium term isShow MoreRelatedEconomics : Classical Economics And Keynesian Economics1665 Words   |  7 Pagesnot like riding a bike, once you know how to do it you will always have it engraved in your head. I will attempt to highlight the key factors of the two theories of economics: classical economics and Keynesian economics. Since Classical Economics is considered to be the first school of economics. I will start to explain this concept first. 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