Keynes Thought That the Behaviour of the Economy in the Short

question 243

Essay

Keynes thought that the behaviour of the economy in the short run was influenced by what he called "animal spirits." By this he meant that businesspeople sometimes felt good about the economy, and carried out lots of investment, and at other times felt bad about the economy, and so cut back on their investment spending. Explain how such fluctuations in investment would lead to fluctuations in GDP and prices.

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Definitions:

Retrieves

The act of getting something back from a place or bringing something to mind from memory.

Alters

In psychology, refers to the different identities or personalities in dissociative identity disorder (DID).

Anterograde Amnesia

Loss of memory from the point of injury or trauma forward, or the inability to form new long-term memories.

Alzheimer's Disease

Alzheimer's disease is a progressive neurological disorder that results in memory loss, cognitive decline, and ultimately the inability to carry out simple daily activities.