A Keynesian approach to fiscal policy would be for government budgets to consistently have a _____ role in the economy.
A) neutral
B) cyclical
C) countercyclical
D) contractionary

Question

Quizplus · Accepted Answer

A Keynesian approach to fiscal policy calls for countercyclical government spending, which means that government budgets should be designed to counteract fluctuations in the economy. In times of recession, the government should increase spending to promote economic growth, and in times of inflation, the government should decrease spending to prevent economic overheating. Therefore, a countercyclical role is the most appropriate choice.

A Keynesian Approach to Fiscal Policy Would Be for Government