Keynesians:
A) accept the countercyclical policy of doing nothing, that is, allowing market forces to work.
B) believe that the level of aggregate demand in the 1930s was sufficient to generate full employment.
C) accept the fact that policymakers should eliminate inflation first before focusing on unemployment.
D) focus on increasing aggregate demand in order to stimulate the economy.

Question

Quizplus · Accepted Answer

Keynesians focus on increasing aggregate demand in order to stimulate the economy. They believe that government policies, such as fiscal and monetary policies, can be used to boost demand and reduce unemployment during times of economic downturns. Therefore, option D is the correct choice. Option A is incorrect because Keynesians do not advocate for doing nothing during an economic downturn. Option B is incorrect because Keynesians believe that during a recession, aggregate demand falls below the level required to maintain full employment. Option C is incorrect because Keynesians prioritize reducing unemployment over eliminating inflation.