According to the Keynesian view, which of the following would most likely stimulate real output if an economy were in a recession?
A) a decrease in tax rates
B) an increase in tax rates
C) a reduction in government expenditures
D) a budget surplus

Question

Quizplus · Accepted Answer

According to Keynesian economics, during times of recession, government intervention through fiscal policy is required to stimulate demand and increase real output. A decrease in tax rates leads to an increase in disposable income, which in turn increases consumer spending and aggregate demand, thereby stimulating real output.

According to the Keynesian View, Which of the Following Would