Conservatives and Keynesians Differ on the Appropriate Response of the Government

Multiple Choice

Conservatives and Keynesians differ on the appropriate response of the government to a recession. Which of the following is a true statement?

A) Keynesians believe that governments should increase spending to make up for a deficiency of aggregate demand.
B) Keynesians believe that governments should intervene in the economy only in the case of an outside shock.
C) Keynesians believe that governments do not need to intervene, because the economy is always in equilibrium.
D) Keynesians believe that governments can prevent an outside shock.