Keynesian Economics

An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.

A supporter of Keynesian economics believes it is the government's job to smooth out the bumps in business cycles. Intervention would come in the form of government spending and tax breaks in order to stimulate the economy, and government spending cuts and tax hikes in good times, in order to curb inflation.


Investment dictionary. . 2012.

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