Keynesian economics emphasizes government intervention during recessions from "summary" of The Economics Book by DK
Keynesian economics suggests that during times of economic recession, government intervention is necessary to stimulate the economy. The theory is based on the ideas put forth by British economist John Maynard Keynes in the 1930s. Keynes argued that when the economy is in a downturn, individuals and businesses may not spend enough to support full employment. As a result, there is a gap between the amount of goods and services produced and the amount that consumers are willing and able to buy. In order to address this gap, Keynesian economics calls for the government to step in and increase its own spending. By doing so, the government can create demand for goods and services, which in turn encourages businesses to produce more and hire more workers. This injection of government spending helps to stimulate economic activity and reduce ...
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