According to the Keynesian view, the large budget deficits of 2008-2015 resulted in
A) an increase in aggregate supply during that period.
B) weak aggregate demand and a continuation of recessionary conditions.
C) an increase in aggregate demand and higher real output during that period.
D) higher interest rates and taxes that slowed economic growth.

Question

Quizplus · Accepted Answer

According to Keynesian theory, government spending can stimulate demand and increase output during a recession. Therefore, the large budget deficits during the period of 2008-2015 would have led to an increase in aggregate demand and higher real output, rather than weak demand and recessionary conditions.

According to the Keynesian View, the Large Budget Deficits of 2008-2015