Analysis

In Great Depression, Franklin D roosevelt impelemnted Keynsian approach. Spent 250 Billion in todays money to innitiatives such as building roads, job creation, socail welfare to increase demand.

Evaluation

Short-run

• Job creation: The policy created millions of jobs, reducing unemployment from 25% to 14% by 1940.
• Economic growth: The government spending stimulated economic growth, as demand for goods and services increased.
• Social benefits: The policy improved living standards for low-income families and vulnerable groups.

Assumption:

• The policy assumed that the government could effectively allocate the funds to create jobs and stimulate economic growth.

Pros:

• It did end up helping the economy grow
• Improved living standards.
• Reduced inequality, more opportunity for all.

Cons:

• The policy increased the government’s debt, which could have long-term implications for the country’s financial stability.

Long-run

• Debt can’t fund other financial initiatives.