Keynes believed that the best method for boosting an economy during a recession was to:
A)increase money supply so that individuals would have more incentive to spend.
B)cut government spending and increase taxes to reduce or even eliminate fiscal deficit.
C)increase government spending and cut taxes so that consumers could spend more.
D)cut both government spending and taxes to reduce government expenditure in the economy.
E)increase both government spending and taxes to increase the role of government in the economy.

Question

Quizplus · Accepted Answer

Keynes believed in the use of expansionary fiscal policy during a recession, which involves increasing government spending and cutting taxes to boost demand and stimulate economic growth. The increased spending would create more jobs and increase wages, leading to an increase in consumer spending and overall economic activity. This was called the "Keynesian prescription."

Keynes Believed That the Best Method for Boosting an Economy