Keynes argued that the surest way to bring the economy out of the Great Depression was to
A) rely on expansionary monetary policy.
B) use expansionary fiscal policy.
C) impose wage controls to prevent drastic decreases in disposable income.
D) leave the economy alone and flexible wages and prices would eventually lead to increases in income and employment.

Question

Quizplus · Accepted Answer

Keynes argued that in times of economic recession, government should take an active role in the economy by increasing government spending or cutting taxes, known as expansionary fiscal policy, to increase aggregate demand and stimulate economic growth. This is in contrast to the laissez-faire approach, which argues that the market should be left to correct itself without government intervention.

Keynes Argued That the Surest Way to Bring the Economy