In the Keynesian model,the difference between no intervention by the government during a recession and intervention using expansionary monetary or fiscal policy is that no intervention will return the economy to its equilibrium level of output ________ than intervention will and at a ________ price level.
A)faster;lower
B)slower;higher
C)slower;lower
D)faster;higher

Question

Quizplus · Accepted Answer

In the Keynesian model, without intervention, the economy is expected to recover more slowly and at a lower price level due to insufficient demand. Expansionary policies aim to speed up recovery by boosting demand, potentially leading to a higher price level.

In the Keynesian Model,the Difference Between No Intervention by the Government