What does Keynes consider essential for maintaining high economic activity?
Understand the Problem
The question is asking about Keynesian economics, specifically what John Maynard Keynes believed was crucial to sustain high levels of economic activity. The options presented suggest different economic policies or conditions related to interest rates and government expenditure.
Answer
Keynes considers state intervention and managing aggregate demand as essential for maintaining high economic activity.
Keynes considers state intervention and managing aggregate demand as essential for maintaining high economic activity.
Answer for screen readers
Keynes considers state intervention and managing aggregate demand as essential for maintaining high economic activity.
More Information
John Maynard Keynes emphasized that government policies should actively manage aggregate demand to prevent economic recessions and instability in the business cycle. By adjusting fiscal policies, such as government spending and tax rates, the government can smooth out fluctuations.
Tips
A common mistake is overlooking the role of government intervention in moderating economic cycles, focusing solely on aggregate demand without considering policy tools.
Sources
- What Is Keynesian Economics? - Back to Basics - imf.org
- Keynesian Economics: Theory and How It's Used - Investopedia - investopedia.com
- Keynesian economics - Wikipedia - en.wikipedia.org
AI-generated content may contain errors. Please verify critical information
