The modern Keynesian approach to cure a recession might include
A)Expanding the money supply or increasing government spending.
B)Expanding the money supply or reducing government spending.
C)Contracting the money supply or increasing government spending.

Question

Quizplus · Accepted Answer

The modern Keynesian approach recommends expanding the money supply or increasing government spending to cure a recession. This is because during a recession, there is a decrease in demand. To increase demand, the government can increase spending or expand the money supply, which will lower interest rates and make it easier for individuals and businesses to borrow money, thus stimulating spending and boosting the economy.

The Modern Keynesian Approach to Cure a Recession Might Include