Identify the main policy tools that American governmentcan employ to address economic problems, andcontrast Keynesian and supply-side economics
Identify the main policy tools that American government
can employ to address economic problems, and
contrast Keynesian and supply-side economics
Supply-side economics is associated with the tax cuts for the economically stronger ones which would in turn increase savings and investment capacity which will ultimately trickle down to the economy as a whole. The supply-side economy is categorized into three aspects- tax policy, regulatory policy, and monetary policies.
The Keynesian concept of a demand-side economy states that the level of demand in an economy is the most important determining factor of economic growth.
Both these macroeconomic theories are in contrast to each other as the former regards supply and the latter regards demand as the determining force in an economy.
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