Question

Keynes argued that the ________ was unable to keep the economy at full employment. as a result, the ________ should take an active role in managing the economy.

Answer 1

Keynes argued that the private sector was unable to keep the economy at full employment. as a result, the government should take an active role in managing the economy.

What is a Keynesian economic theory?

According to Keynesian economics, the government should raise demand to spur economic growth. Consumer demand, according to Keynesians, is the main engine of an economy. Therefore, the hypothesis is in favor of an expansionary monetary policy. Government spending on infrastructure, unemployment benefits, and education are its key tools. Overusing Keynesian programs has the disadvantage of raising inflation. An economic school of thinking known as Keynesian Economic Theory holds that for economies to recover from recessions, government involvement is required.

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