Keynesians and Discretionary Fiscal Policy | CFA® Level 1 Exam Prep

Keynesians and Discretionary Fiscal Policy

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Keynesians believe that a discretionary fiscal policy:

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A. B. C. D.

C

Keynesians believe that aggregate demand has a major influence. They maintain that suppliers will produce at a level consistent with anticipated aggregate demand. Hence, to increase economic production when the economy is operating below capacity, Keynesians advocate spurring the demand in the market through the use of an expansionary fiscal policy.