According to Keynes, which policy would be appropriate for an economy that is experiencing a wave of pessimism on the part of consumers and businesses?
A) increased taxes
B) make less money available for loans
C) do nothing and wait to see if it gets better on its own
D) increased government spending

Question

Quizplus · Accepted Answer

Keynesian economics suggests that during periods of low demand and pessimism among consumers and businesses, the government should increase spending to stimulate the economy. This approach aims to boost economic activity by creating jobs and increasing demand, thereby countering the negative sentiment.

According to Keynes, Which Policy Would Be Appropriate for an Economy