The Keynesian framework indicates that government can play an important role in determining aggregate output by
A)changing the level of government spending or taxes.
B)raising consumer confidence.
C)raising investor confidence.
D)changing the money supply and interest rates.

Question

Quizplus · Accepted Answer

The Keynesian framework emphasizes the role of government in stimulating demand to achieve full employment. One way to accomplish this is by changing the level of government spending or taxes, which can affect aggregate output through changes in consumer and investment spending. By increasing government spending or reducing taxes, the government can boost demand and stimulate economic growth. Conversely, by reducing government spending or increasing taxes, the government can reduce demand and slow down the economy.

The Keynesian Framework Indicates That Government Can Play an Important