1. Many of the expansionary periods during the twentieth century occurred during wars.

Why do
you think this is true?
Aside from loss of buildings, infrastructures and other human costs, wars also affect
the economy by creating demand, employment, innovation and profits for business. It
triggers inflations as well. They need to expand some factors of the economy so that a
country will recover from its losses. Encouraging full employment and building new
businesses and infrastructures will happen after wars. If there are many employed people, it
means many consumers will buy goods and services. Prices will go high and inflation will
come. Inflation helps the economy expands.

2. John Maynard Keynes was the first to show that government policy could be used to change
aggregate output and prevent recession by stabilizing the economy. What measures are being
proposed currently to stimulate growth in the Philippine economy?
GDP measures the country’s economic growth. The higher the GDP, the more
investors will be interested in a country. More investments means higher employment rate.
The higher the employment rate, the greater the consumer spending. If many people have
money, it triggers inflation. The prices will rise and the economy benefits and grows.