Question

Keynesian economics:

a.relies on the idea that free markets can regulate themselves.
b.requires a balanced budget for optimum efficiency.
c.encourages the increased role of government to achieve full employment and economic growth.
d.advocates supply side economics.

Answer 1

John Maynard Keynes, a famous British capitalist economist, stated that people earn money from their work, and Businesses pay people to work; Keynes developed Keynesian economics to understand "the Great depression" of the 1930s, and he promoted increased government spending and lower taxes to perk up demand to lift the economy.

Thereby the correct answer is (C): encourages the increased role of government to achieve full employment and economic growth.

Answer 2

The correct answer is: C) encourages the increased role of government to achieve full employment and economic growth. For a Keynesian, consumer demand is the most important force in an economy. Correspondingly, keynesian economics backs expansionary fiscal policy, which consist of government spending on infrastructure, education and unemployment benefits.