Widespread acceptance of the Keynesian theory of fiscal policy
A) caused most economists to reject the public choice view of budget deficits.
B) relaxed the political pressure to balance the budget and, hence, paved the way for the persistent budget deficits of the last five decades.
C) was based on the view that continual budget deficits would help stabilize the economy.
D) increased the pressure for a constitutional amendment mandating that the federal government balance its budget.

Question

Quizplus · Accepted Answer

The widespread acceptance of the Keynesian theory of fiscal policy relaxed political pressure to balance the budget because it was believed that deficit spending could help stimulate the economy during times of recession. This paved the way for persistent budget deficits in the last five decades.

Widespread Acceptance of the Keynesian Theory of Fiscal Policy