For the most part, Keynesians believe that:
A)monetary policy is best at fighting recessions.
B)fiscal policy is best at fighting recessions.
C)a monetary rule is best for evening out the business cycle.
D)balancing the budget is the best policy for fighting a recession.

Question

Quizplus · Accepted Answer

Keynesians believe that fiscal policy - specifically government spending increases and tax cuts - is the best way to fight a recession by boosting aggregate demand. Monetary policy, such as adjusting interest rates, may also be used but is seen as less effective in the short term. A monetary rule is not a commonly held belief among Keynesians, and balancing the budget during a recession would likely worsen the economic situation.

For the Most Part, Keynesians Believe That