Light relief


Thank you to Jason Keal who found the following. It shows two economists trying to advise a politician on how to get Britain out of recession. A policy suggestion is made that you should not repeat in an exam. (By the way, VAT is the European term for an indirect sales or consumption tax. “Shore up the pound” means trying to prevent the exchange rate from depreciating–perhaps by using foreign currency reserves to buy the British currency.)

2) Are you having difficulty understanding the Keynesian vs New Classical debate? Perhaps the following will help.  Hayek was an Austrian economist who argued that promoting free markets (rather than government intervention steering markets) was the better macroeconomic policy.


Listen to the lyrics, identifying key economic terms, and read them on the link below. Notice that “animal spirits” could be thought of as the CONFIDENCE of consumers/firms. Keynes considered that lower interest rates would NOT alone lead to higher investment by firms.

lyrics&questions for Fear the boom and the bust


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