Pedro is a Keynesian economist and argues that in a downturn, state intervention is the key for economic recovery.
Keynesians believe that GDP (Gross Domestic Product) is positively influenced by aggregate demand. Hence, in order to boost GDP growth after a downturn, the state should step in the economy by increasing public expenditure. This will help to create job positions, increase the disposable income of households and therefore increase overall demand for goods and services.
If more goods and services are demanded, the same cycle restarts as firms would hire more staff in order to increase production to a greater extent to meet the new necesities. The more people who is employed, the more income avilable to continue increasing private expenditure and investments, which in turn GDP and bring economic growth.
<em><u>To make it clearer, the following is the GDP formula for a certain time period</u></em>
<em>GDP = Private Consumption + Private investment + Public expenditure + Exports - Imports </em>
If this means like political views, thinking two different things could affect relationships negatively as there’s a barrier of disagreeing and arguing about it etc. i hope that’s what you mean
While Hoover ignored pleas of help from many people believing that the government should not intervine on their personal lives, much of it had to do with corrupt banking and overproduction from farms. Hoover could have regulated the banks better but the depression is not entirely his fault.
