According to Keynes, in order to get the economy out of a recession, the government should _____
A) follow an expansionary fiscal policy.
B) encourage firms to export to other nations.
C) follow a contractionary fiscal policy.
D) follow a contractionary monetary policy.
E) not interfere in the market and let the market system heal itself.

Question

Quizplus · Accepted Answer

According to Keynesian economics, during a recession, government should increase its spending and decrease taxes. This is known as expansionary fiscal policy. The increase in government spending creates new jobs and increases demand, which leads to economic growth. This policy is meant to stimulate demand and boost economic activity.

According to Keynes, in Order to Get the Economy Out