Keynes believed that monetary policy had no effect on the economy, whether the problem was a mild recession or a depression.

Question

Quizplus · Accepted Answer

Keynes believed that monetary policy could be effective in boosting the economy during a mild recession, but during a severe depression, he argued that fiscal policy (government spending and taxation) was more effective in stimulating demand and creating jobs.

Keynes Believed That Monetary Policy Had No Effect on the Economy