Which of the following describes a possible Keynesian solution to inflation? A t

Question

Which of the following describes a possible Keynesian solution to inflation? A tax increase on consumer income. O A reduction in taxes for businesses that increase A surge in military A major increase in what the U.S. government spends on healthcare. QUESTI 10 points Save Answer Keynes believed that recessions would most likely Too little aggregate Too little aggregate Too much aggregate Too much aggregate be caused by: QUESTI 10 points Save Answer During a recession, the aggregate demand curve O Stays the same. Shifts to the right. Shifts upward. Shifts to the left. QUESTI 10 points Save Answer Which of the following does NOT affect consumption? The availability of credit All of the above DO affect

Explanation / Answer

1. Option A.

A tax increase in consumer income is a possible keynesian solution to inflation because as tax increases , consumers consume less, which pulls the Aggregate demand curve to the left.

2. Option B.

According to keynesian Unemployment was caused by lack of expenditures which in turn leads to reduced aggregate demand.

3. Option b.

During Recession Unemployment level rises and the aggregate demand curve shifts to the right.

3. Option D.

When disposable income increases people either serve or spend their income and it leads to consumption.

When people have more assets they are said to be more wealthy which is directly accompanied by consumption.

Consumption is also determined by availability of credit.

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