Assignment:
Keynes's actions for recovery from the collapse would include the United States using federal funds to invest in infrastructures such as buildings and roads. Also, his model would allow for small cutbacks to workers to help balance the budget. Keynes would also recommend tax cuts and incentives for big corporations. Lastly, the idea of Keynesian economics would support the idea of lowering the value of the U.S. dollar. The idea is to boost exports and reduce the U.S. trade deficit. Of course, this is not a long-term fix to the economic problem because the Keynesian model assumes there is friction in the market. Besides, price does not adjust quickly to shifts in demands or supply.
In contrast to Keynes is the Neoclassical model, which is against government intervention during an economic collapse. The Neoclassical model assumes that markets have few frictions and prices adjust quickly, but that prices do not change. So, this means that if there is a shock to the supply or demand that prices are flexible, but quantities are not. Neoclassical economists believe that the government should focus on creating new policies to reduce the unemployment rate which takes time, but this model does work better in the long run when prices have time to adjust.
Finally, economists believe that the Neoclassical models work better when the country is near full employment and the economy is good while the Keynesian model is better in times of crisis.