As contrasted to the Keynesian view, mainstream economists believe that ________ than Keynesian economists believe.
A) potential GDP is less important
B) any crowding out effect is smaller
C) the real GDP growth rate is larger
D) the effects from fiscal stimulus are weaker
E) the multiplier effect is larger

Question

Quizplus · Accepted Answer

Mainstream economists tend to believe that the effects from fiscal stimulus, such as government spending or tax cuts, are weaker than Keynesian economists believe. They argue that any potential increase in demand from the stimulus may be offset by a decrease in private investment or higher interest rates, leading to less overall impact on the economy.

As Contrasted to the Keynesian View, Mainstream Economists Believe That