Keynes thought that economies with high unemployment would have higher aggregate demand.
Keynesian approach to combating inflation and unemployment
According to Keynesian macroeconomic theory, fiscal policy that stimulates investment and consumption, such as tax reductions, is the best way to terminate a recession. Direct increases in government spending are another option that would cause the aggregate demand curve to move to the right.
He thus started arguing for government action to end unemployment and reverse the economic downturn. He asserted that additional government spending was required in addition to government job programs to lower unemployment—even if it resulted in a budget deficit.
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