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Experiences of The Great Depression

Please explain how the experiences of the U.S. in the Great Depression and in WWII demonstrate the importance of aggregate spending (Keynesian theory) as the primary engine of post-WWII.

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The core to Keynesian theory is that, at least, in the short run product prices and wages are downwardly inflexible. The result is an aggregate supply curve that is horizontal. The art of price flexibility which provides an automatic built in mechanism which is constantly pushing the capitalist economy toward the natural rate of unemployment and its potential output. To Keynesians, price inflexibility means that unemployment can ...

Solution Summary

The solution to how the Great Depression and World War II affected spending after the war in a good and bad way for we as a nation had to start over. The nation had to learn how to use the current workforce of women and let them stay and work with the men. We also had to learn to make new laws and regulations that will help us to improve the products and use what we learned during wartime and use those ideas in peacetime.

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