WEEK 6 Free Writing

This week, I learned some knowledge about Keynesian Economy from the Macroeconomic class. Keynesian is a economic theory that says the output (GDP) is equal to the aggregate spending in the short run especial during the recessions. 

From the diagram above, the AE standard for Aggregate expenditures, and Y is the GDP/Income of a nation. Because people's spending is depends on how much money they earned (income), thus the income is equal to the output in Keynesian theory. 

I also learned several equations which related to Keynesian theory. For an example, AE (Aggregate expenditures) = C (autonomous spending) + I (invest) + G (government purchases) + X(import) - M (export). Because export is going our from the nation to another country, therefore, the equation should subtract export. 

Personally, I think I am not fully understand what the Keynesian theory is really about, unless I only know some basic ideas and formulas of it. I hope that as I learn more and read more materials about the Keynesian Economy, I will know more about it and hope one day I can analyze this theory on my own perspective. 

Work Cited:

Martin, Lawrence. "Keynesian Economics-Short Run with Sticky Prices". EC202 Lecture Notes. Oct.2013. Web. Oct.17. 2013