The Keynesian economics and Multipliers
Before 1930 economics like lord Keynes followed say's which states that supply creates it own demand This means that people supplied commodities so a? to purchase others so every commodity is the market is a demand of another There are all polices at that time were geared towards increasing income from the supply side. These policies however could not work in Europe and other countries due to the economic depression that was pramiiity at that time
The economic depression was caused by the following
Over production which was not backed by an increase in aggregated demand
Most people did not have money and there was high level of unemployment
Low savings
Incomes low investment low invest rates etc and therefore suoj.:y failed to create its own demand.
Money was issuer according to the gold standard i.e there was little money to purchase the commodities