full employment level of GDP Which of the following is a mechanism Keynes advoca

Question

full employment level of GDP Which of the following is a mechanism Keynes advocated for dealing with a situation of depressed output? Making less money available Raising taxes Increasing government expenditures Increasing supply incentives The multiplier effect means that a given change in expenditures will change equilibrium income by an amount greater than the initial change in expenditures will change equilibrium income by an amount less than the initial change in expenditures will change equilibrium income by an amount equal to the initial change in expenditures will change MFC by a multiple of the initial change in expenditures

Explanation / Answer

3) Keynes emphasized the role of government in the economy while classical believed in the lassiez farrire. But after the great depression in 1929, the keynesian model provided the solution to recover the economy. Therefore, option c is correct.

4) option a is coorect. multiplier shows change in expenditure will increase the income more than the initial change in expenditure.

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