What Did the Keynesian Approach to Fiscal Policy Call For

question 118

Multiple Choice

What did the Keynesian approach to fiscal policy call for?  

• A) budget deficits during periods of inflationary pressure 
• B) budget surpluses during periods of high unemployment 
• C) a balanced budget despite the state of the economy 
• D) tax cuts during recession

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Definitions:

Warehouse Space

The area available in a warehouse for the storage of goods, products, or materials.

Marginal Cost Curves

Graphical representations that show how the cost of producing one additional unit of a good varies as the quantity of output produced changes.

Profit Maximizers

Refers to firms or individuals who alter their production or operational levels to achieve the highest possible profit margins.

Lump Sum Subsidy

A fixed amount of money provided by the government or a body to support a business or market, which does not change with the level of output.