How did Keynes propose to solve the problem of high unemployment?
A) increase the growth rate of the money supply
B) allow wages to decline, so that firms will want to hire more workers
C) put on wage and price controls, so wages won't rise and firms won't have to lay people off to cut costs
D) have the government increase its demand for goods and services

Question

Quizplus · Accepted Answer

Keynes proposed that in times of high unemployment, the government should increase its demand for goods and services by increasing public spending and/or cutting taxes. This would create a multiplier effect, as the increased demand would lead to increased production, which in turn would lead to increased employment.

How Did Keynes Propose to Solve the Problem of High