Final answer:
The Keynesian perspective advocated for government intervention and increased spending as a solution to the Great Depression, which involved direct government spending and tax cuts to stimulate consumption and investment, thereby raising aggregate demand and kickstarting economic recovery.
Step-by-step explanation:
The Keynesian perspective addressed the economic market failure of the Great Depression by advocating for government intervention and increased spending to raise aggregate demand and pull the economy out of a recession. This approach is reflected in actions such as tax cuts to stimulate consumption and investment, as well as direct increases in government spending. Keynesians argue that during downturns, the government should act counter-cyclically by increasing spending or cutting taxes, and do the opposite in times of economic boom to cool off inflation.
During the 1930s, Keynesian economic policies were implemented as a response to the Great Depression. For instance, President Franklin D. Roosevelt embraced the idea of increasing government spending as part of his New Deal policies. His administration rolled out several public works programs and relief measures, aiming to boost employment and revive economic activity, thus embracing the essential tenets of Keynesian economics.