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Economic Policy: Influential Theories

Question 11 • ISP ONLY: Economics S5000XX

During the Great Depression, Keynes promoted actions to encourage economic recovery.

Answer
A
contractionary
B
expansionary

Explanation

Keynes argued that during a downturn, governments should increase spending and stimulate demand to encourage businesses to produce and hire more. These are expansionary actions, so the correct choice is expansionary.

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