Project Auditing is Evaluating the Stages During the Life...

Project auditing is designed to conduct an evaluation at a number of stages during the life cycle of the project. Even though a project will be evaluated at the end as part of the post control, an audit will help identify if the processes are being followed and are the resources and revenue being utilized throughout the project. A project audit can be a formal or less than formal investigation in any area of the project. Purposes are generated for an evaluation and there is an extent on how they will be carried out, and considerations on how measurements will be applied, and how the final report will be developed. As the project nears completion, it will then move into the final phase which will be the project termination. There are†¦show more content†¦They are the project audit initiation, project baseline definition, establishing an audit database, preliminary analysis of the project, audit report preparation, and project audit termination. The project audit initiation wi ll start the process by creating the purpose, scope and methodology that will be used to determine the information that will be analyzed. The project baseline definition determines what areas of the project will be analyzed and the standards that will be compared against similar projects that have been conducted or benchmarked. Establishing an audit database which requires gathering an assessment of how the project is doing by inputting the information and determining how the areas of cost performance, output quality and the current project status are doing. The preliminary analysis of the project will inform the project manager of the findings before the report is released. The audit report preparation will be organized in the format that was set initially which will provide findings and recommendations. The last step in the life cycle of the audit is termination which is when the review is finished and the audit team moves on to another project. 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The Big Five Personality Traits - 1020 Words

The Big Five Personality Traits Kelly Wilson Benedictine University Organizational Behavior MGT 320-D2A5 Teresa Pavone November 06, 2015 The Big Five Personality Traits Personality traits reflect people’s characteristic patterns of thoughts, feelings, and behaviors. Motivation is a factor that is highly dependent upon personality and because of this, managers must be able to recognize and respond to the different traits. Personality has been studied extensively throughout the years and researchers have found five distinct personality traits that are most relevant to organization; agreeableness, conscientiousness, neuroticism, extraversion and openness. Because of the way personality influences a person’s performance, these are†¦show more content†¦Those who are less conscientious, then, are less organized, irresponsible, and less self-disciplined (Griffin amp; Moorhead, 2014, p. 67). To motivate someone who is highly conscientious, a manager may assign them to analyze specific set of data each month that will be presented in a quarterly meeting with higher administration. This will capitalize on their sense of responsibility t o the organization as well as give them a sense of pride in their hard work. For the less conscientious person, a manager should take a different approach. Since they cannot focus like their more conscientious counterparts, they can contribute to the organization in different ways. A manager can give this individual numerous small tasks to complete so they are not focusing on too much at one time. Neuroticism Highly neurotic people tend to experience anxiety, moodiness, irritability, sadness, and emotional instability on a more frequent basis than those who are less neurotic (Cherry, n.d., figure 4). Someone who is highly neurotic may not handle stressful situations as well as a less neurotic coworker, who is likely to be poised, secure, and calmer (Griffin amp; Moorhead, 2014, p. 67). A neurotic individual may require more reassurance in their position, so to keep this employee motivated, a manager will need to provide positive feedback along with any negative feedback when it is necessary. Extraversion Extraversion is described as the quality of being comfortable withShow MoreRelatedThe Big Five Personality Traits867 Words   |  4 Pages Of the Big Five personality traits, I scored highest on neuroticism. I compared myself to my friend. My friend scored highest on extraversion. I scored lowest on extraversion, whereas my friend scored lowest on agreeableness. I was somewhat surprised at my results that my friend received. However, I was not surprised by my results. I am a typically anxious person, so I knew I would probably score high on neuroticism. 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Development of Business Represents a Part of Evolution Process

Question: Development of Menu Represents A Significant Part Of Why Evolution Process? Answer: Introduction: In the present time, the restaurant business has evolved significantly in order to keep all the customers satisfied with the provided products and services. Development of menu represents a significant part of evolution process, as it can induce customersmanagement to avail specific foods and services (Wansink and Love 2014). For that reason, restaurants often focus on developing the layout of the menu that is readable, informative and profitable. Psychologists have provided a list of practices that every restaurant should incorporate in their menu design for gaining higher profit from the market. In this report, the focus would be provided on the menu psychology of an Australian casual dining restaurant namely Guzman y Gomez. After establishment in 2006, Guzman y Gomez has developed 67 restaurants stores throughout Australia (guzmanygomez.com 2017). The report will aim to evaluate the psychological aspect of the menu. It will also focus on highlighting the factors that can have impa ct on the menu planning procedure. Evaluation of menu: As per the article by Malka and Soto (2015) restaurants that focuses on designing their menu in such a way so that it can highlight their most profitable offerings. Highlighting the items has been utilized in the retail sector for many years. The store counter, window and mannequin display are used to promote clothing and merchandise. Psychologists identified that customer notice of merchandise can induce them to purchase products on regular basis. On the other hand, if a customer fails to notice, it will be a zero probability of selling that product. Restaurants have focused on using merchandise concept in developing menu for highlighting their best products or most profitable item. It has been termed as menu psychology or menu design psychology. Over the years, the design or structure of menu has evolved on continues basis in order to provide restaurants the opportunity to enhance profit in the competitive market. Guzman y Gomez specializes in producing Tex-Mex dishes such as nachos, burritos, quesadillas and taco, which has allowed the restaurant to develop a separate space for it in the market. For that reason, it has focused on placing all the prime items in the menu list in such a way so that it can grab the attention of the customers significantly. The menu design of Guzman y Gomez has also included small pictures of all the items within the menu so that it can provide customers an idea regarding the kind of foods they will receive after ordering a particular product. As illustrated by Johns, Edwards and Hartwell (2013) four different categories or factors are available including Stars, Puzzles, Plow horses and dogs that restaurants need to accommodate within the menu design in such a way so that it can ensure maximum p rofit for the organization. Now, Stars represents those products that are high in sales and high in profit. On the other hand, Puzzles reflects products that high in profit but low in sales. Plow horses represents low profit but high sales products while Dogs reflects low profit low sales products (Fleming 2013). The menu design aspect of Guzman y Gomez has focused on categorizing all the products within these factors for creating maximum impact on the sales volume. Summary of findings: As described by Ozdemir (2012) restaurants can use multiple nuances to coax customers in spending on more high profit items. Guzman y Gomez also has designed the menu in such a way so that it can able induce customers to purchase the most profitable products on regular basis. Moreover, Guzman y Gomez has also provided a conscious effort at the time of setting prices for each item. It has avoided of using dollar sign at the time of placing price in the menu list. Psychologists have highlighted that dollar symbols can actually induce customers to feel that they are spending larger amount when they are not. Moreover, Guzman y Gomez has also tried to avoid pricing strategy of 99 cents at the end. General assumption on 99 cents is that the particular product is cheap and unsatisfying. For that reason, the pricing strategy of Guzman y Gomez has focused more on setting up the price with 95 cents at the end (Roseman, Mathe-Soulek and Higgins 2013). With increasing competition, all restaurant s are trying to introduce some unique and innovative servicesmanagement in order to provide value added services to the customers. It has induced Guzman y Gomez to include some additional information like weight of the products, ingredients of the products and also amount of calorie one would consume by eating a specific item into their menu design. It has allowed Guzman y Gomez to provide some value added services to all the customers, which is likely to create positive impact in retaining them for long period of time. It has allowed Guzman y Gomez to achieve consistent growth in the extremely competitive Australian restaurant market. Thus, it can be assessed that both placing of the products in the menu list and price setting of the items can create major impact on the overall business level of the organization (Ozdemir and Caliskan 2015). Therefore, it is necessary for all the restaurants to utilize both the factors in such a way so that it can induce customers to spend more on t he most profitable items on the product list. Recommendations: The present design of menu of Guzman y Gomez has helped them to achieve continues success in the market. Guzman y Gomez has included a stepwise procedure in their present menu design in order to induce customers to spend more on more than one product (Yang 2012). However, some areas of menu design will have to consider by Guzman y Gomez in order to maximize the impact on the business level. Firstly, it will have to focus on using top right theory of the menu design comprehensively for inducing customers to select most profitable items on regular basis. The top right theory suggests that customers look at the top right section of the menu list at the beginning. For that reason, keeping the most profitable item in this section will allow that Guzman y Gomez to grab the attention of the customers easily. Secondly, Guzman y Gomez can also use box technique at the top right section in order to prominent the prime products comprehensively. Thirdly, Guzman y Gomez will have to focus on plac ing the Puzzle products at the most prominent position of the menu card. It will help the restaurant to increase the sales volume of the products that are high in profit but low in sales. Moreover, increasing popularity of Puzzle products will allow Guzman y Gomez to increase the number of prime products in their offering list in near future (Feldman et al. 2014). Fourthly, Guzman y Gomez will have to focus on developing menu with all the detailed information about the each item apart from the names and price list. For instance, it needs to add information about the time customers will have to wait for a particular product before serving. It will also need to provide detailed information about the amount of calorie associated with the each of the item. Fifthly, Guzman y Gomez needs to focus on using round figure prices rather than decimal pricing strategy. It can help Guzman y Gomez to increase the value of overall services. Conclusion: The above illustration has highlighted the fact that development of effective menu design is critical for achieving success in the market. It induces customers to purchase products that are more profitable in nature, which eventually creates positive impact on the overall sales volume. For that reason, restaurants need to be very careful at the time of designing the menu, as it can help to handle all the future challenges of the market effectively. References: Feldman, C., Su, H., Mahadevan, M., Brusca, J. and Hartwell, H., 2014. Menu psychology to encourage healthy menu selections at a New Jersey University.Journal of Culinary Science Technology,12(1), pp.1-21. Fleming, A., 2013. Restaurant menu psychology: Tricks to make us order more.The Guardian,8. guzmanygomez.com, 2017.Guzman y Gomez - Mexican Taqueria. [online] Guzmanygomez.com. Available at: https://www.guzmanygomez.com [Accessed 30 Apr. 2017]. Johns, N., Edwards, J.S. and Hartwell, H.J., 2013. Menu choice: satisfaction or overload?.Journal of Culinary Science Technology,11(3), pp.275-285. Malka, A. and Soto, C.J., 2015. Rigidity of the economic right? Menu-independent and menu-dependent influences of psychological dispositions on political attitudes.Current Directions in Psychological Science,24(2), pp.137-142. Ozdemir, B. and Caliskan, O., 2015. Menu design: A review of literature.Journal of Foodservice Business Research,18(3), pp.189-206. Ozdemir, B., 2012. A review on menu performance investigation and some guiding propositions.Journal of Foodservice Business Research,15(4), pp.378-397. Roseman, M.G., Mathe-Soulek, K. and Higgins, J.A., 2013. Relationships among grocery nutrition label users and consumers attitudes and behavior toward restaurant menu labeling.Appetite,71, pp.274-278. Wansink, B. and Love, K., 2014. Slim by design: Menu strategies for promoting high-margin, healthy foods.International Journal of Hospitality Management,42, pp.137-143. Yang, S.S., 2012. Eye movements on restaurant menus: A revisitation on gaze motion and consumer scanpaths.International Journal of Hospitality Management,31(3), pp.1021-1029.

The Keynesian School of Economics an Overview Essay Example

The Keynesian School of Economics: an Overview Essay What was the historical background of the school? Answer: The Keynesian school, proponents of the branch of economics now termed as Keynesian economics had come into existence towards the beginning of the twentieth century. This school was arguably the first viable alternative to the Classical school of thought. The school argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle. These theories were based on the ideas of 20th-century British economist John Maynard Keynes (1883- 1946). The premise forming the basis of Keynesian economics were first presented in ‘The General Theory of Employment, Interest and Money’ (1936). Roots of Keynes’s ideas can be traced back to before 1929 and he adopted a macroeconomic approach. World War I and the economic controls acted out requiring an overall view of the economy. The growth of large-scale industrial production and trade made the economy more susceptible to statistical measurement and control, making the inductive, aggregate approach more feasible than the past. In fact, this approach was increasingly necessary as the public became more eager for the government to deal actively with unemployment. He represented the British Treasury at the Treaty of Versailles—was appalled at the conditions of the peace treaty as he observed that nations had failed to look at the case from a macroeconomic point of view. The Great Depression of the 1930’s also had a profound effect in the development of Keynes’s ideas. In fact his ideas materialized when he was trying to analyze the problems of trade cycle (recessions and booms), one of the greatest problems of the classical economists. We will write a custom essay sample on The Keynesian School of Economics: an Overview specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Keynesian School of Economics: an Overview specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Keynesian School of Economics: an Overview specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Furthermore the economic thinking of the period was concerned with the problems of secular stagnation (globally declining growth rate) of the capitalist society. Some speculated that as the national income increased, consumption expenditures rose less rapidly than total income, and savings increased more rapidly. Wages were recognized as a source of demand for goods as well as a cost of production, and cutting wages was frequently opposed as providing no real remedy for unemployment; this was the macroeconomic thinking. The mature private-enterprise economies of the Western world were less vigorous after World War I. The population growth was declining; most of the world had already been colonized; there seemed no more room for geographic expansion; consumption appeared to outrun production as incomes and savings rose; less resources were allotted for the purpose of research and development as a result there were no new inventions like the steam engine, electricity, etc to stimulate vast capital investments. Also, the decline of vigorous price competition reduced the rate of replacement of old machinery with new and more efficient ones, and the economy was being dragged downward furthermore when the growing accumulated of depreciation funds from the past investments were not spent quickly enough. Question- 02: What were the major tenets of the school? Answer: The complete doctrine of the Keynesian economists was set as a better option than those provided by the classical economists. Keynes argued that the economy had moved towards The Great Depression only because of the flawed notion that the economy would adjust to the prevailing market conditions and move towards equilibrium. He proposed the government should take a more ‘hands on’ approach. Some of the major tenets include: 1) The school put forward the Keynesian Theory of Employment which began with the principle of effective demand. That is, total employment depends on total demand (aggregate effective demand) and unemployment rose due to a shortage of effective demand (thus they’re agreeing to Malthus’s remark that there was a need for unproductive consumption and government investment). In the calculation of a country’s output which consisted of consumption, investment and government expenditure(Y= C + I + G). Keeping G constant it can be noted that the immediate determinants of Income and thus employment are consumption and investment spending. The money spent on final gods and services, let it be consumption or investment generated income. 2) The Keynesian economists pointed out that there was a tendency for savings to exceed investment (which might reduce AD and lead to unemployment) which is why they supported government intervention to close this gap. It was this school which appealed for the end of lassiez- faire (minimum role of government). For instance, the government should stimulate the economy by lowering interest rates and adopting a deficit budget during imes of economic depression. 3) The government may increase the marginal propensity to consume (and thereby stimulating the economy) through the redistribution of income by adopting a progressive taxation policy (as MPC is higher for lower income earners). 4) The Keynesians stated that the marginal efficiency of capital (expected rate of profit of a new investment) will have a tendency to decline (as more and more investments compete against each other; increas ed supply price of capital goods). They thought that it was difficult to maintain full employment in a Capitalist economy unless the rate of interest was low enough. 5) In periods of falling aggregate demand for goods and services, firms respond to lower sales by reducing production and discharging or laying off workers, not by insisting on wage cuts. This is because prices are sticky downwards. Any decline in effective demand initially cause reductions in output and employment rather than decline in the price level. Deflation occurs only under conditions of extremely severe depression. This wage and price rigidity is also a major tenet on this school 6) Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending-consumption, investment, or government expenditures-cause output to fluctuate. If government spending increases, for example, and all other components of spending remain constant, then output will increase. Keynesian models of economic activity also include the multiplier effect (increase in output by a multiple of the original change in spending that caused it). Thus, a ten-billion-dollar increase in government spending could cause total output to rise by fifteen billion dollars (a multiplier of 1. 5) or by five billion (a multiplier of 0. 5). Contrary to what many people believe, Keynesian analysis does not require that the multiplier exceed 1. 0. For Keynesian economics to work, however, the multiplier must be greater than zero. Question- 03: Who did the School benefit or seek to benefit? Answer: The Keynesian School was successful mainly because it focused on painful problems such as unemployment and depression, which were present at that time. It offered something almost to everyone and rationalized what was already being out of necessity. The school’s stress on labor and emphasis on job creation amidst the great depression gained widespread recognition. Business interests benefited from government contracts and government incentives to get the economy out of depression/ recession. When bankers had extensive excess reserves in the 1930s, they found a vast and profitable area for investment in government bonds, and government controls gave the banking system liquidity, security and stability. Reformers and intellectuals enjoyed vastly increased employment in government service that had grown out of Keynesian thinking with less risks of being laid off. Farmers long had favored easy monetary policies and low interest rates. They also came to rely heavily on government spending programs for agriculture. Such forms of government expenditures seemed to bear more than proportionate benefits due to the multiplier effect. Question- 04: How was the school valid, useful or correct in its time? Answer: The introduction of Keynes ideas in the world stage was nothing short of revolutionary. They were perhaps the first group of economists to consider economic theory during policymaking. World wars, The Great depression and the growing impediments of modern life had already weakened the foundations of lassiez- faire. Simply waiting for the ‘markets to stabilize’ was too painful for many to agree to. Keynes had provided both an explanation of fluctuations and a program to tackle it. The role of economists and economic analysis in shaping the direction of government policy was thus greatly increased. It might be interesting to note that the Keynesian approach became immensely useful even to those who did not accept Keynes’s policy conclusions. It established a new set of analytical tools through which to view the economy, encouraged the further development of national income accounting and stimulated a vast and productive effort at empirical studies of the real world which was almost non- existent before their arrival. Question- 05: Which tenets of the school became lasting contributions? Answer: Many say that the founder of the Keynesian School of thought, J. M. Keynes was the one who had contributed the most in the twentieth century. His book ‘The General Theory of Employment, Interest and Money’ influenced economic theory as well as public policy. One of Keynes’s chief contributions was to tie economic to the great economic problems of the day (depression). The impact of the ‘General Theory’ had a dynamic effect n economic study as several tools had been added under this category namely consumption function (marginal propensity to consume); saving function (marginal propensity to save); liquidity preference (transaction, precautionary, speculative demand); marginal efficiency of capital; multiplier effects and the IS- LM analysis. Another important input made by Keynes was in the use of expectations. His integration of expectation with his theory of money and mar ginal efficiency made notable advances in economic investigation. While Classical economists assumed full employment, Keynes and therefore the Keynesian School emphasized on under- employment equilibrium (equilibrium at less than full employment). This meant that increase in the quantity of money does not necessarily mean increase in the price levels (inflation) as long as there is spare capacity in the economy. Towards the end of the school’s long list of contributions it would be fair to mention that the school had critics from several circles. Despite the fact that many of the Keynesian policy prescriptions have been discredited, Keynesian tools of analysis still dominate macroeconomic theory. These theorists were successful in demonstrating the inadequacies of Classical economics, and in the process established a system that is not, itself, without flaws. The importance of their contribution is not its degree of precision, but its role in advancing the debate—in stimulating the argument and in providing the framework for that debate. Source: V. Lokhnathan. ; A History of Economic Thought, 9th ed. The Keynesian School of Economics an Overview Essay Example The Keynesian School of Economics: an Overview Essay What was the historical background of the school? Answer: The Keynesian school, proponents of the branch of economics now termed as Keynesian economics had come into existence towards the beginning of the twentieth century. This school was arguably the first viable alternative to the Classical school of thought. The school argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle. These theories were based on the ideas of 20th-century British economist John Maynard Keynes (1883- 1946). The premise forming the basis of Keynesian economics were first presented in ‘The General Theory of Employment, Interest and Money’ (1936). Roots of Keynes’s ideas can be traced back to before 1929 and he adopted a macroeconomic approach. World War I and the economic controls acted out requiring an overall view of the economy. The growth of large-scale industrial production and trade made the economy more susceptible to statistical measurement and control, making the inductive, aggregate approach more feasible than the past. In fact, this approach was increasingly necessary as the public became more eager for the government to deal actively with unemployment. He represented the British Treasury at the Treaty of Versailles—was appalled at the conditions of the peace treaty as he observed that nations had failed to look at the case from a macroeconomic point of view. The Great Depression of the 1930’s also had a profound effect in the development of Keynes’s ideas. In fact his ideas materialized when he was trying to analyze the problems of trade cycle (recessions and booms), one of the greatest problems of the classical economists. We will write a custom essay sample on The Keynesian School of Economics: an Overview specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Keynesian School of Economics: an Overview specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Keynesian School of Economics: an Overview specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Furthermore the economic thinking of the period was concerned with the problems of secular stagnation (globally declining growth rate) of the capitalist society. Some speculated that as the national income increased, consumption expenditures rose less rapidly than total income, and savings increased more rapidly. Wages were recognized as a source of demand for goods as well as a cost of production, and cutting wages was frequently opposed as providing no real remedy for unemployment; this was the macroeconomic thinking. The mature private-enterprise economies of the Western world were less vigorous after World War I. The population growth was declining; most of the world had already been colonized; there seemed no more room for geographic expansion; consumption appeared to outrun production as incomes and savings rose; less resources were allotted for the purpose of research and development as a result there were no new inventions like the steam engine, electricity, etc to stimulate vast capital investments. Also, the decline of vigorous price competition reduced the rate of replacement of old machinery with new and more efficient ones, and the economy was being dragged downward furthermore when the growing accumulated of depreciation funds from the past investments were not spent quickly enough. Question- 02: What were the major tenets of the school? Answer: The complete doctrine of the Keynesian economists was set as a better option than those provided by the classical economists. Keynes argued that the economy had moved towards The Great Depression only because of the flawed notion that the economy would adjust to the prevailing market conditions and move towards equilibrium. He proposed the government should take a more ‘hands on’ approach. Some of the major tenets include: 1) The school put forward the Keynesian Theory of Employment which began with the principle of effective demand. That is, total employment depends on total demand (aggregate effective demand) and unemployment rose due to a shortage of effective demand (thus they’re agreeing to Malthus’s remark that there was a need for unproductive consumption and government investment). In the calculation of a country’s output which consisted of consumption, investment and government expenditure(Y= C + I + G). Keeping G constant it can be noted that the immediate determinants of Income and thus employment are consumption and investment spending. The money spent on final gods and services, let it be consumption or investment generated income. 2) The Keynesian economists pointed out that there was a tendency for savings to exceed investment (which might reduce AD and lead to unemployment) which is why they supported government intervention to close this gap. It was this school which appealed for the end of lassiez- faire (minimum role of government). For instance, the government should stimulate the economy by lowering interest rates and adopting a deficit budget during imes of economic depression. 3) The government may increase the marginal propensity to consume (and thereby stimulating the economy) through the redistribution of income by adopting a progressive taxation policy (as MPC is higher for lower income earners). 4) The Keynesians stated that the marginal efficiency of capital (expected rate of profit of a new investment) will have a tendency to decline (as more and more investments compete against each other; increas ed supply price of capital goods). They thought that it was difficult to maintain full employment in a Capitalist economy unless the rate of interest was low enough. 5) In periods of falling aggregate demand for goods and services, firms respond to lower sales by reducing production and discharging or laying off workers, not by insisting on wage cuts. This is because prices are sticky downwards. Any decline in effective demand initially cause reductions in output and employment rather than decline in the price level. Deflation occurs only under conditions of extremely severe depression. This wage and price rigidity is also a major tenet on this school 6) Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending-consumption, investment, or government expenditures-cause output to fluctuate. If government spending increases, for example, and all other components of spending remain constant, then output will increase. Keynesian models of economic activity also include the multiplier effect (increase in output by a multiple of the original change in spending that caused it). Thus, a ten-billion-dollar increase in government spending could cause total output to rise by fifteen billion dollars (a multiplier of 1. 5) or by five billion (a multiplier of 0. 5). Contrary to what many people believe, Keynesian analysis does not require that the multiplier exceed 1. 0. For Keynesian economics to work, however, the multiplier must be greater than zero. Question- 03: Who did the School benefit or seek to benefit? Answer: The Keynesian School was successful mainly because it focused on painful problems such as unemployment and depression, which were present at that time. It offered something almost to everyone and rationalized what was already being out of necessity. The school’s stress on labor and emphasis on job creation amidst the great depression gained widespread recognition. Business interests benefited from government contracts and government incentives to get the economy out of depression/ recession. When bankers had extensive excess reserves in the 1930s, they found a vast and profitable area for investment in government bonds, and government controls gave the banking system liquidity, security and stability. Reformers and intellectuals enjoyed vastly increased employment in government service that had grown out of Keynesian thinking with less risks of being laid off. Farmers long had favored easy monetary policies and low interest rates. They also came to rely heavily on government spending programs for agriculture. Such forms of government expenditures seemed to bear more than proportionate benefits due to the multiplier effect. Question- 04: How was the school valid, useful or correct in its time? Answer: The introduction of Keynes ideas in the world stage was nothing short of revolutionary. They were perhaps the first group of economists to consider economic theory during policymaking. World wars, The Great depression and the growing impediments of modern life had already weakened the foundations of lassiez- faire. Simply waiting for the ‘markets to stabilize’ was too painful for many to agree to. Keynes had provided both an explanation of fluctuations and a program to tackle it. The role of economists and economic analysis in shaping the direction of government policy was thus greatly increased. It might be interesting to note that the Keynesian approach became immensely useful even to those who did not accept Keynes’s policy conclusions. It established a new set of analytical tools through which to view the economy, encouraged the further development of national income accounting and stimulated a vast and productive effort at empirical studies of the real world which was almost non- existent before their arrival. Question- 05: Which tenets of the school became lasting contributions? Answer: Many say that the founder of the Keynesian School of thought, J. M. Keynes was the one who had contributed the most in the twentieth century. His book ‘The General Theory of Employment, Interest and Money’ influenced economic theory as well as public policy. One of Keynes’s chief contributions was to tie economic to the great economic problems of the day (depression). The impact of the ‘General Theory’ had a dynamic effect n economic study as several tools had been added under this category namely consumption function (marginal propensity to consume); saving function (marginal propensity to save); liquidity preference (transaction, precautionary, speculative demand); marginal efficiency of capital; multiplier effects and the IS- LM analysis. Another important input made by Keynes was in the use of expectations. His integration of expectation with his theory of money and mar ginal efficiency made notable advances in economic investigation. While Classical economists assumed full employment, Keynes and therefore the Keynesian School emphasized on under- employment equilibrium (equilibrium at less than full employment). This meant that increase in the quantity of money does not necessarily mean increase in the price levels (inflation) as long as there is spare capacity in the economy. Towards the end of the school’s long list of contributions it would be fair to mention that the school had critics from several circles. Despite the fact that many of the Keynesian policy prescriptions have been discredited, Keynesian tools of analysis still dominate macroeconomic theory. These theorists were successful in demonstrating the inadequacies of Classical economics, and in the process established a system that is not, itself, without flaws. The importance of their contribution is not its degree of precision, but its role in advancing the debate—in stimulating the argument and in providing the framework for that debate. Source: V. Lokhnathan. ; A History of Economic Thought, 9th ed.