Question

Industries that tend to be highly sensitive to inflation, deflation and the ups and downs of business trends would best be described as?

Answer 1

Industries that tend to be highly sensitive to inflation, deflation, and the ups and downs of business trends would best be described as Keynesian.

What is the main idea of Keynesian economics?

According to Keynesian economics, a healthy economy spends or invests more than it saves and that demand drives supply. Keynes believed that governments should raise expenditure even if it meant going into debt in order to generate jobs and enhance consumer purchasing power during a recession.

The numerous macroeconomic theories and models of how aggregate demand significantly affects economic production and inflation are known as Keynesian economics. According to the Keynesian perspective, the level of overall demand need not match the economy's capacity for production.

Keynesians contend that because prices are somewhat rigid, changes in any aspect of spending, whether government, investment, or consumer spending, affect output. For instance, the output will rise if government expenditure rises while all other spending factors stay the same.

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