The theory "Market operation is self-sufficient, So the outside power such as government does no good except for harm." Was expounded by Adam smith's "invisible hand" and Say's "supplies create demands". But it isn't explicable because of the breaking out of capitalist world economic crises from 1929 to 1993. Then the fact, cyclical economic crises in market economy operation, is a bitter irony to the theory "Market is self-sufficient. The theory" effective demand" has ever been the theoretical basis of western countries' overcoming economic degradation and formulating macroeconomic policy. John Maynard Keynes who epitomized the thought of the school is regarded as the contributory of modern western economics theories. Keynes's way to solve lack of effective demand is to strengthen government interfere, to stimulate consumption and increase investment by financial deficit and expansionary monetary policy. Presently, our country's economy also meets with the same problem of lack of effective demand. Although its reason is fundamentally different from what Keynes analyzer, it also do harm. In view of the situation of lack of effective demand in our country, it is the most important to find out the real reason and its solution. The writer be taken to enlarge effective demand in our country.*Speed up adjustment of industrial structure, and open op the rural market energetically.* Bring into better balance the relations balance the relations between income distribution, improve the incomes of rural inhabitant, and urban inhabitants, especially the group whose incomes is low or medium.* Improve investment conditions of enterprises and increase enterprises' ability to invest and their enthusiasm.* Develop energetically consumption credit, and breed new economic increasing point. *Further perfect social safeguard system, and guide consumer's expectation.
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