ECONOMICS (CBSE/UGC NET)

ECONOMICS

MONETARY POLICY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
In contrast with classical economics, Keynesian economics
A
reduces the role of government.
B
increases the role of government to stimulate an economy in recession.
C
relies more heavily on the laws of supply and demand.
D
more strongly emphasizes the importance of individual businesses to the overall health of the economy.
Explanation: 

Detailed explanation-1: -Keynesian economics argues that demand drives supply and that healthy economies spend or invest more than they save. To create jobs and boost consumer buying power during a recession, Keynes held that governments should increase spending, even if it means going into debt.

Detailed explanation-2: -While Classical economists believe there should be limited or no government intervention in the market, Keynesian Economics posit that government spending can help jump-start an economy out of recession by increasing demand.

Detailed explanation-3: -Difference Between Classical and Keynesian Economics Keynesian economics believes that government spending is the most important economic activity. On the other hand, classical economics believes that a self-regulating economy is efficient and there is no need for government intervention.

Detailed explanation-4: -Keynesian economists justify government intervention through public policies that aim to achieve full employment and price stability.

There is 1 question to complete.