John Maynard Keynes believed that a recession was caused entirely by

Question

Quizplus · Accepted Answer

Keynes believed that recessions were caused by a lack of demand, or a deficiency in aggregate demand. He argued that in times of recession, there is a reduction in consumption and investment, which leads to a decrease in aggregate demand. This, in turn, leads to a fall in output, employment, and income. Thus, the solution to a recession, according to Keynes, was to increase aggregate demand through government intervention, such as fiscal and monetary policies.

John Maynard Keynes Believed That a Recession Was Caused Entirely