In 2009, the Obama administration advocated and Congress passed a massive spending and tax relief package of about $800 billion to stimulate aggregate demand. This policy would be favored by
A) Keynesian economists but not new Keynesian economists.
B) monetarists but not new classical economists.
C) Keynesian and new Keynesian economists.
D) monetarists and new Keynesian economists.

Question

Quizplus · Accepted Answer

Keynesian economists emphasize government intervention to stimulate aggregate demand during economic downturns, while new Keynesian economists focus on the role of imperfect information and price stickiness in causing economic fluctuations. Both schools of thought would support the use of fiscal policy, such as government spending and tax relief, to boost demand and stimulate economic growth.

In 2009, the Obama Administration Advocated and Congress Passed a Massive