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>
Answer: Unconditional response
Explanation:
An unconditional response is one that occurs naturally and innately. In this type of response, the person does not need to carry out a learning process. This type of response responds to the natural and birth abilities that a person or animal has.
It is normal that, in different times in our lives, human beings act in this way, where a learning process is not carried out and they react instantly, in the case of animals it is the same and something very frequent since animals they act on instinct. An example of this would be the cat that ran to the plate of food. Here the cat acted instinctively, there was no process, something that is common for animals in this type of situation.
Among the most famous examples of unconditional response is Pavlov's theory, which is based on the salivation experiment with the dog. The dog salivated not only when food appeared but when other food-related stimuli were present.
