-Refer to Exhibit 15-1.Keynesians are often accused of having an "inflationary bias." This is due at least in part to their advocacy of expansionary monetary policy when they believe it is needed to take the economy from point
A) B to point C.
B) B to point A.
C) D to point C.
D) A to point B.

Question

-Refer to Exhibit 15-1.Keynesians are often accused of having an "inflationary bias." This is due at least in part to their advocacy of expansionary monetary policy when they believe it is needed to take the economy from point
A) B to point C. 
B) B to point A. 
C) D to point C. 
D) A to point B.

Quizplus · Accepted Answer

Keynesians advocate for expansionary monetary policy to stimulate the economy during periods of low demand or recession, which corresponds to moving from point B (a lower output, higher unemployment point) to point C (a higher output, lower unemployment point) on the economic graph. This approach can lead to inflation if not carefully managed, hence the "inflationary bias" accusation.