4
QuizMultiple Choice

5.4 Economic Policy: Influential Theories

Question 4 • * HSA 26-27 Economics

John Maynard Keynes believed that governments should increase spending in order to

Answer
A
increase prices.
B
increase supply.
C
decrease demand.
D
increase demand.

Explanation

Keynes argued that when private spending is too low, governments can boost economic activity by spending more themselves. Government purchases add to total demand for goods and services, encouraging businesses to produce and hire more. Therefore, the correct choice is increase demand.

AI-written and checked against the verified answer.

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