John Maynard Keynes (5-Jun-1883 to 21-Apr-1946).
John Maynard Keynes
Keynesian theory
There are many economists who have argued this, but the most major one is arguably John Maynard Keynes.
Tax revenue changes when the economy goes into a recession. When there is a recession, the government increases tax revenue. The government does this because less people are spending money.
Normally in a recession the government would want to raise the equilibrium level of income. This can be done in one of two ways: by increasing government spending or by decreasing taxes.
a Keynesian would argue that the essence to solve recession lies with demand management. When an economy is experiencing a boom (inflationary gap), government should tax people, reduce spending ...etc... to soak up the demand. When an economy is experiencing a bust (recessionary gap), government should decrease tax and increase government spending (using money they gained during the boom) to increase the demand of an economy.
Keynesian theory
No, they regulate the economy by doing 2 things: 1)increasing government spending and decrease taxes to fight recession 2) decrease government spending and increase taxes to fight inflation.
Roosevelt Recession
There are many economists who have argued this, but the most major one is arguably John Maynard Keynes.
Tax revenue changes when the economy goes into a recession. When there is a recession, the government increases tax revenue. The government does this because less people are spending money.
Roosevelt Recession
Your Answer: John Maynard Keynes Correct
Normally in a recession the government would want to raise the equilibrium level of income. This can be done in one of two ways: by increasing government spending or by decreasing taxes.
a Keynesian would argue that the essence to solve recession lies with demand management. When an economy is experiencing a boom (inflationary gap), government should tax people, reduce spending ...etc... to soak up the demand. When an economy is experiencing a bust (recessionary gap), government should decrease tax and increase government spending (using money they gained during the boom) to increase the demand of an economy.
I believe that would be Keynesianism. John Maynard believed the government should "prime the economic pump" by creating multiple jobs and public work projects for citizens during times of recession, even if it meant running up the national debt.
The government can use deficit spending to increase aggregate demand and pull the economy out of recession.
decrease taxes and increase government spending