$20 for $28.00?

In the movie we recently watched an experiment in which a twenty dollar bill was auctioned off to someone for twenty eight dollars. This experiment concluded that people had this so called "animal spirit". This leads them to think emotionally, even pridefully rather than rationally. This gives the US economy a reason to follow the Keynesian theory of economics. Another example from the movie was the crash of the tulip stock. It doesn't matter what the product is, people will always want to win money. Unfortunately this is the "spirit" that leads to a crisis. This is why government supervision is necessary in the US economy.

My Keynesian Point of View

I still believe in the mainstream point of view. I believe people have animal spirit, therefore government regulation is essential to our economy. Keeping supply, demand and the money supply on track cannot be done just by the people. People splurge their money on unnecessary items everyday; they also buy on credit even when it isn't advisable. We need a higher authority to fix that inflation! Also, I agree with the theory that businesses don't lower wages, but fire workers. In my personal experience, my mom used to be a lab technician for a contact lense company. The owners were in a low profit period, so instead of lowering wages, they started laying people off. This is true for other company too. This also proves that the mainstream point as valid.

Mainstream View

I believe in the Mainstream view because I think it is essential for there to be a higher authority to control the economy. Not ever consumer is rational and many do buy on impulse and credit. This can cause inflation and we need fiscal and monetary policy to fix these problems. If "we don't care if businesses shut down" then we'd be in a huge economic crisis. The government plays an important role in keeping the economy on the road.