According to modern Keynesians,which of the following is an appropriate policy during a recession?
A) Expand the money supply and increase government spending.
B) Expand the money supply and decrease government spending.
C) Contract the money supply and increase government spending.
D) Contract the money supply and decrease government spending.

Question

Quizplus · Accepted Answer

According to modern Keynesians, during a recession, the appropriate policy is to expand the money supply and increase government spending. This is known as expansionary monetary policy and fiscal policy. The idea behind this policy is that it will stimulate demand and increase economic activity, leading to job creation and growth in the economy. This policy is based on the belief that during a recession, the private sector may not have enough confidence to invest and consume, and therefore, the government needs to step in to increase demand.

According to Modern Keynesians,which of the Following Is an Appropriate