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how macroeconomists tackle macroeconomic problems?

Sagot :

jepessoa

Answer:

Economics is not an exact science, that means that there is no secret formula that will solve economic issues. Economics is a social science since it deals with individual's actions and these actions cannot be controlled. Economists can assume households and businesses will act a certain way, but they cannot force them to do so or even be sure that the desired effects will happen.

Economists are divided into two main streams or schools:

  1. Neo-neo-classicists that believe that the market will eventually self regulate in the long run. Economic problems must be dealt by managing the money supply.
  2. Keynesians that believe that in the short run, the government can actually affect the economy and can change some economic factors. They deal with problems mainly through fiscal policies, i.e. increasing or decreasing government spending.

Personally, I believe that classic economic theories are wrong because theories can rarely apply in real world situations. That is why this theory has continuously been losing strength in the past 90 years. Human are not rational and they will not follow instructions, they will do what they believe is the best thing, not what other people tell them to.

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