According to standard keynesian economic theory

Reference no: EM13690247

According to standard Keynesian economic theory, an increase in government spending has a greater impact in terms of increasing the level of aggregate income--that is, is more "simulative"--if it is:

a. financed by raising taxes to pay for it

b. financed by selling Treasury debt on the open market

c. financed by creating new money--that is, by "monetizing the debt"

d. Keynesian theory holds that increased government spending reduces the level of aggregate income--it is NOT simulative

Reference no: EM13690247

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