According to Keynes,in order to get the economy out of a recession,the government should
A)plan for a budget deficit
B)encourage firms to export to other nations,thereby jump-starting the economy
C)follow an expansionary monetary policy
D)follow a contractionary monetary policy
E)do nothing and rely on the market system to heal itself

Question

Quizplus · Accepted Answer

Keynes believed that during a recession, private investment and consumption decrease, leading to a decline in overall aggregate demand. Therefore, the government should step in to stimulate demand by increasing its own spending, even if it means running a budget deficit. This increased government spending can create jobs and income, which can lead to increased consumption and investment by the private sector, thus helping to pull the economy out of a recession.

According to Keynes,in Order to Get the Economy Out of a Recession,the