Which policy would Keynes's followers support when an increase in business optimism shifts the aggregate demand curve to the right away from long-run equilibrium?
A) decreasing taxes
B) decreasing the interest rate
C) increasing the money supply
D) increasing taxes

Question

Quizplus · Accepted Answer

Keynes's followers would support increasing taxes to counteract the increase in aggregate demand and prevent the economy from overheating, thus maintaining long-run equilibrium.

Which Policy Would Keynes's Followers Support When an Increase in Business