Question

If a Keynesian economist were asked to make a statement about the relationship between the government and the economy, what might she say? a. “Government intervention in the economy is sometimes necessary.” b. “Government intervention is the only solution for economic problems.” c. “It is never a good idea for the government to intervene in the economy.” d. “The government should be primarily concerned with public safety and health.” e. “The government’s only role is to provide defense and protect property rights.”

Answer 1

Option A

If a keynesian Economist were asked to make a statement about relationship between the government and the Economy.

• She might say that a government intervention in the Economy is sometimes very necessary.
• According to Keynesian Economists, the government intervention is very necessary as it can bring stability in the Economy.
• According to them, government intervention is a way of breaking down the Economic problems like recession and unemployment.
• They believe that higher government intervention and increased government spending would decrease higher unemployment rates.