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
E)active

Question

Quizplus · Accepted Answer

A Keynesian approach to fiscal policy would advocate for countercyclical fiscal policy, which means that government budgets should have an active role in stabilizing the economy during economic downturns or recessionary periods. This could involve increasing government spending, reducing taxes, or a combination of both to stimulate aggregate demand and boost economic activity. During periods of economic expansion, the government would then save or reduce spending to prevent overheating and inflation.

A Keynesian Approach to Fiscal Policy Would Be for Government