Use the figure below to answer the following question(s).
Figure 12-3

-Refer to Figure 12-3.If an economy is currently operating at Y₁,which of the following would a Keynesian economist be most likely to favor?

Question

Use the figure below to answer the following question(s).
Figure 12-3
 
-Refer to Figure 12-3.If an economy is currently operating at Y₁,which of the following would a Keynesian economist be most likely to favor?

Quizplus · Accepted Answer

A Keynesian economist would most likely favor a shift in the federal budget toward a deficit because it would increase government spending and aggregate demand, which could help stimulate the economy and move it closer to full employment. A surplus, a balanced budget or an increase in taxes would have the opposite effect and could lead to a contraction in output and employment.

Use the Figure Below to Answer the Following Question(s)