Figure 11-4
-According to Keynesian analysis, which of the following policy combinations would most likely to move the economy illustrated in Figure 11-4 to full employment?
A)increase both taxes and government transfer payments
B)reduction in government purchases and increase in taxes
C)increase in government purchases and reduction in taxes
D)increase in taxes to reduce the government deficit

Question

Figure 11-4 
-According to Keynesian analysis, which of the following policy combinations would most likely to move the economy illustrated in Figure 11-4 to full employment?
A)increase both taxes and government transfer payments 
B)reduction in government purchases and increase in taxes 
C)increase in government purchases and reduction in taxes 
D)increase in taxes to reduce the government deficit

Quizplus · Accepted Answer

Keynesian economics suggests that increasing government purchases and reducing taxes can stimulate aggregate demand, leading to higher output and employment, thus moving the economy towards full employment.

Figure 11-4 -According to Keynesian Analysis, Which of the Following Policy Combinations