While much of the U.S.business world was struggling with the problems of the Great Depression and clinging to the classical view that the country's economic problems would rectify themselves,John Maynard Keynes felt that the way out of the depression was to
A) hold the lid on consumer demand while expanding production.
B) expand effective aggregate demand by using government's power to spend and tax.
C) make larger numbers of people employable.
D) limit government power to tax.
E) nationalize all basic industries as the first step toward socialism.

Question

Quizplus · Accepted Answer

John Maynard Keynes believed that the way out of the Great Depression was to expand effective aggregate demand by using government's power to spend and tax. He argued that government intervention was necessary to stimulate demand and create employment, which would then have a positive ripple effect on the economy as a whole. This view became the basis of Keynesian economics and has influenced economic policymaking in many countries.

While Much of the U