According to the Keynesian view,if policy makers thought the economy was about to fall into a recession,which of the following would be most appropriate?
A)a reduction in government expenditures
B)an increase in government expenditures or reduction in taxes,financed by borrowing
C)a balanced federal budget
D)an increase in taxes

Question

Quizplus · Accepted Answer

According to the Keynesian view, during a potential recession, an increase in government expenditures or a reduction in taxes, financed by borrowing, would be most appropriate. This is because increased government spending or reduced taxes can increase aggregate demand, which can help stimulate the economy and prevent a recession. A reduction in government expenditures or an increase in taxes, on the other hand, can decrease aggregate demand and potentially worsen a recession. A balanced federal budget may not be appropriate during a recession, as it could also decrease aggregate demand and worsen economic conditions.

According to the Keynesian View,if Policy Makers Thought the Economy