Suppose the economy suffers a high rate of unemployment. According to Keynesian economists, the government should increase employment by
A) decreasing money supply.
B) balancing the budget.
C) not doing anything.
D) increasing government spending.

Question

Quizplus · Accepted Answer

According to Keynesian economics, during times of high unemployment, the government should increase its spending to stimulate demand and create jobs. This is known as expansionary fiscal policy. Therefore, increasing government spending is the best choice to increase employment.

Suppose the Economy Suffers a High Rate of Unemployment