Asked by Luisa Fernanda Bohorquez on May 06, 2024
Verified
According to Keynes,
A) only consumer spending could get us out of a depression.
B) the problem during recessions was inadequate aggregate demand.
C) the key to investment spending was aggregate supply.
D) all of the statements are true.
Keynes
Refers to John Maynard Keynes, an economist whose ideas fundamentally changed the theory and practice of macroeconomics and economic policies.
Aggregate Demand
A sum of needs for every good and service across an economy, measured at a particular aggregate price level within a set time period.
Consumer Spending
The sum of expenditures made by all households in an economy on various goods and services.
- Familiarize oneself with the economic doctrines of Keynes, specifically his analysis of recessions and advocacy for governmental action.
- Acquire insight into the significance of aggregate demand and supply in economic principles.
Verified Answer
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Final Answer :
B
Explanation :
According to Keynes, the problem during recessions was inadequate aggregate demand, which could be addressed through increased government spending, tax cuts, and monetary policy. While consumer spending is important, it alone cannot stimulate the economy out of a depression, and the key to investment spending is not aggregate supply but rather the expectation of future demand.
Learning Objectives
- Familiarize oneself with the economic doctrines of Keynes, specifically his analysis of recessions and advocacy for governmental action.
- Acquire insight into the significance of aggregate demand and supply in economic principles.