Keynesian countercyclical budget policy suggests that

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Keynesian countercyclical budget policy suggests that a budget deficit is needed if the economy is operating at less than full employment. This is because the deficit spending can help stimulate demand, create jobs, and boost economic growth. In contrast, during an inflationary boom, the government may need to implement contractionary fiscal policies, such as reducing spending or increasing taxes, to cool down the economy and prevent inflation from becoming too high. However, the policy does not advocate always balancing the budget or focusing on reducing the national debt.

Keynesian Countercyclical Budget Policy Suggests That