Which of the following is a Keynesian approach for dealing with a recession?
A)Raise interest rates.
B)Increase government expenditure.
C)Raise taxes.

Question

Quizplus · Accepted Answer

According to Keynesian economics, during a recession, the government should increase its expenditure to stimulate demand and boost economic activity. This is because during a recession, households and firms tend to save more and spend less, which leads to a decline in aggregate demand. By increasing government expenditure, the government can offset this decrease in demand and keep the economy running. Raising interest rates or taxes, on the other hand, can worsen a recession by reducing investment and consumption spending. Therefore, the best choice is to increase government expenditure.

Which of the Following Is a Keynesian Approach for Dealing