Chapter 12 Curiosities

The flow chart indicates that increased spending by a government results in the trade deficit getting smaller as the loanable fund market sees an increase in price which results in the dollar gaining value (meaning foreigners cannot buy as many American goods). I would argue what pushes politicians to adopt Keynesian theory is not them having read Keynes' general theory, but that Keynesian prescriptions are popular to votes who are not economically literate.