Question

Question 3 of 10

Answer 1

Answer:

Option B, spend more money to help reduce unemployment, is the right answer.

Explanation:

Option B is correct because Keynes argued that the government should increase its expenditure because this increase in expenditure will generate employment in the economy. As a result, the income of the people will rise which will result in an increase in the aggregate demand. Thus, a rise in aggregate demand will induce the producer to supply more. Therefore, the real GDP of the country will also increase.