Question

According to the Keynesian macroeconomic model, O high taxes are responsible for starting the Great Depression, and the economy is fairly stable. O too little government spending is responsible for starting the Great Depression, and markets produce the best macroeconomic outcomes. O too little private spending is responsible for starting the Great Depression, and government intervention is required to maintain continued economic growth. decreases in the quantity of money is responsible for starting the Great Depression, and fluctuations in the quantity of money are responsible for most economic recessions.

Answer 1

Ans: too little private spending is responsible for starting the Great Depression, and government intervention is required to maintain continued economic growth.

Explanation:

During the Great Depression , Keynes has played a pivotal role by providing some solution to eradicate this business cycle from the economy. According to him, the root cause of the Great Depression is the inadequate aggrgate demand. It leads less investment in the economy . As a result , the situation becomes more precarious in all economic level. So he has suggested that government intervention is required to maintain continued economic growth. It means xpansionary fiscal measures can increase aggregate demand in the economy.