Keynes advocated federal budget deficits.What did he believe that such a deficit would overcome?
A) inflation
B) unemployment
C) trade deficits
D) trade surpluses

Question

Keynes advocated federal budget deficits.What did he believe that such a deficit would overcome?  
A) inflation 
B) unemployment 
C) trade deficits 
D) trade surpluses

Quizplus · Accepted Answer

Keynes believed that federal budget deficits could overcome unemployment by stimulating demand and increasing spending in the economy. He argued that during times of economic downturns, the private sector may not generate enough demand to maintain full employment, and therefore government should step in to create demand through deficit spending.

Keynes Advocated Federal Budget Deficits