The ________ view says that fiscal stimulus has a multiplier effect that makes it a ________ tool to fight a deep recession.
A) mainstream; powerful
B) "free lunch"; powerful
C) Keynesian; powerful
D) Keynesian; weak
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The Keynesian view argues that fiscal stimulus has a multiplier effect, which means that government spending can increase overall economic output by more than the amount of the original spending. This view supports the idea that fiscal stimulus can be a powerful tool to fight a deep recession. Therefore, option C, "Keynesian; powerful," is the correct answer.

The ________ View Says That Fiscal Stimulus Has a Multiplier