According to Keynesian school of thought what should be the-00559
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vu cs401 Computer Architecture and Assembly Language Programming.
It can also be found in
vu cs401 Mid Term Solved Past Paper No. 3.
Question 1: According to Keynesian school of thought, what should be the role of government in order to bring the economy out of depression?
Answer:
Keynes introduced demand-pull theory which emphasizes strongly the intervention of government into economy.
According to him economy may be boosted up by increasing expenditure. In the initial stage government can inject money in the form of investment and higher wage rate to the government employees. This will create higher demand which in return result in more investment by firms.
