Which of the following news quotes best describes a Keynesian view of a recession?
A)"Rapid computerization is creating obsolete workers and higher unemployment."
B)"The unexpectedly tight fiscal policy is raising spending and lowering unemployment."
C)"The anti-inflationary policy of the Bank of Canada is increasing spending."
D)"The cuts in government spending have helped lower consumer spending and created unemployment."
E)"Businesses are very worried about future sales and have lowered their purchases of capital equipment."

Question

Quizplus · Accepted Answer

Keynesian economics emphasizes the role of aggregate demand in determining economic output. A recession is a period of declining economic activity, and Keynesian economists believe that it is caused by a fall in aggregate demand. Choice E describes a situation in which businesses are worried about future sales and have lowered their purchases of capital equipment. This would lead to a fall in aggregate demand and could trigger a recession.

Which of the Following News Quotes Best Describes a Keynesian