What effective argument did John Maynard Keynes use to influence fiscal policy in Canada?
A) Balancing the national budget at all times is sound economic policy.
B) Natural economic forces are NOT necessarily adequate to move the economy toward its potential output level.
C) The government does NOT need to stimulate output in order for the economy to achieve its potential output level.
D) Increases in taxes and increases in government purchases are equally effective in closing an expansionary gap.

Question

What effective argument did John Maynard Keynes use to influence fiscal policy in Canada?  
A) Balancing the national budget at all times is sound economic policy. 
B) Natural economic forces are NOT necessarily adequate to move the economy toward its potential output level. 
C) The government does NOT need to stimulate output in order for the economy to achieve its potential output level. 
D) Increases in taxes and increases in government purchases are equally effective in closing an expansionary gap.

Quizplus · Accepted Answer

Keynes argued that natural economic forces alone cannot always move the economy towards its potential output level and that government intervention through fiscal policy is necessary to stimulate demand and stabilize economic fluctuations.

What Effective Argument Did John Maynard Keynes Use to Influence