ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -According to Keynesian economics, state intervention is necessary to moderate the booms and busts in economic activity, otherwise known as the business cycle.

Detailed explanation-2: -Keynesian economics is a theory that says the government should increase demand to boost growth. 1 Keynesians believe that consumer demand is the primary driving force in an economy. As a result, the theory supports the expansionary fiscal policy.

Detailed explanation-3: -According to Keynesian economic theory, the government should increase demand in order to boost growth. Keynesians hold the belief that the primary driving force in an economy is consumer demand.

Detailed explanation-4: -The Keynesian Model came about when economist John Maynard Keynes observed that the economy is not always at full employment. In other words, the economy can be below or above its potential.

Detailed explanation-5: -Key points Keynesian economics is based on two main ideas. First, aggregate demand is more likely than aggregate supply to be the primary cause of a short-run economic event like a recession. Second, wages and prices can be sticky, and so, in an economic downturn, unemployment can result.