Question

In 1938 Roosevelt put Keynesian economic theory to work by requesting billions of dollars for work relief and farm aid in an attempt to sustain the purchasing power of individual Americans and stimulate the economy.

A. True
B. False

Answer 1

True.

Step-by-step explanation:

• In an attempt to revive the American economy after the end of the Great Depression, US President Roosevelt adopted the theories of John Maynard Keynes to increase deficit spending in the economy in 1938.
• The Keynesian theory propounded that increasing government expenditures would increase demand and stimulate the economy.
• Therefore, President Roosevelt believed that requesting billions of dollars for work relief and farm aid would help the consumers to increase their purchasing power which, in return, would increase demand for investment and economic expansion.