The economy will only reach equilibrium and prosperity through the self-regulation of the free market.
The government should reduce taxes to promote economic growth by increasing aggregate supply.
The government can use deficit spending to increase aggregate demand and pull the economy out of recession.
The federal government should have a balanced budget every year to protect economic growth.
1 answer
The statement that is a fundamental part of Keynesian economics is:
"The government can use deficit spending to increase aggregate demand and pull the economy out of recession."
Keynesian economics emphasizes the role of government intervention, particularly through fiscal policy, to manage economic cycles and stimulate demand during downturns.
