How did Keynes propose to solve the problem of high unemployment?
A)Increase the growth rate of the money supply.
B)Allow wages to decline, so that firms will want to hire more workers.
C)Put on wage and price controls, so wages won't rise and firms won't have to lay people off to cut costs.
D)Have the government increase its demand for goods and services.

Question

Quizplus · Accepted Answer

Keynes proposed that the government should increase its spending on goods and services, in order to stimulate demand and create jobs. This would increase employment, because firms would need to hire more workers to produce the additional goods and services. This approach is known as fiscal policy or demand-side economics. Options A and C are not effective solutions as increasing the money or controlling wages and prices may lead to inflation or other economic issues, while option B is not a sustainable solution as it can lead to lower consumer spending and further exacerbate the problem of unemployment.

How Did Keynes Propose to Solve the Problem of High