When an Economy Is Operating Below Its Potential Capacity, Keynesian

Multiple Choice

When an economy is operating below its potential capacity, Keynesian economists argue that:

A) taxes should be raised if the government is currently running a budget deficit.
B) taxes should be lowered but only if the government is running a budget surplus.
C) the government should cut taxes and/or increase spending in order to stimulate aggregate demand.
D) all of the above.