Synthesized answer
The book explains that at certain times in the business cycle, an economy can become over-productive or under-consumptive, leading to a vicious spiral of massive layoffs and production cuts. This happens as businesses try to balance aggregate supply and demand [1]. Full employment is not the only possible macro equilibrium; an economy can also reach an underemployment equilibrium [1].
To address an underemployment equilibrium and achieve full employment, something is needed to boost or stimulate demand. While business investment might seem like a solution, its individualistic nature makes it unlikely to restore full employment quickly [1]. Keynes suggests that the public budget and government expenditures are the most efficient means to restore full employment. Financing a deficit by borrowing from private households and businesses can quickly restore full employment and simultaneously redirect funds [1].
Synthesized from the book passages below. Chat with the book on Feynman for follow-up.
From the book
itics that the sentence structures of the book are quite incomprehensible and almost unbearable to read, the book is an essential reading for all those who desire a basic education in economics. The key to understanding Keynes is the notion that at particular times in the business cycle, an economy can become over-productive (or under-consumptive) and thus, a vicious spiral is begun that results in massive layoffs and cuts in production as businesses attempt to equilibrate aggregate supply and demand. Thus, full employment is only one of many or multiple macro equilibria. If an economy…
ses is a quick, direct way to restore full employment while at the same time, redirecting or siphoning Categories: Business & Economics Pages: 410 Snippet: Although considered by a few critics that the sentence structures of the book are quite incomprehensible and almost unbearable to read, the book is an essential reading for all those who desire a basic education in economics.
Title: The general theory of employment, interest and money by John Maynard Keynes Description: Resource added for the Economics ?10-809-195? courses. --- Google Books --- Title: The General Theory of Employment, Interest and Money by John Maynard Keynes Description: John Maynard Keynes is the great British economist of the twentieth century whose hugely influential work The General Theory of Employment, Interest and * is undoubtedly the century's most important book on economics--strongly influencing economic theory and practice, particularly with regard to the role of government in…