Question

Keynesian economists believe that the best way to solve the problem of high unemployment is

A. increases in the money supply to increase investment.
B. increases in government spending to stimulate demand.
C. increases in taxes to reduce consumption.
D. to do​ nothing; the economy will rapidly adjust on its own.

Answer 1

Keynesian economists advocate for increased government spending to address high unemployment, aligning with the concept of expansionary fiscal policy to stimulate economic demand and achieve full employment.

Step-by-step explanation:

Keynesian economists believe that the best way to solve the problem of high unemployment is B. increases in government spending to stimulate demand. This is backed by the principle that during a recession, expansionary fiscal policy is necessary, which includes tax cuts to encourage consumption and investment, or an increase in government spending that would shift the aggregate demand curve to the right. These measures aim to bring the economy towards full employment and potential GDP.