Keynesian economic policies

Definition

Keynesian economic policies are based on the ideas of economist John Maynard Keynes and emphasize government intervention in the economy during times of recession. These policies focus on stimulating aggregate demand through increased government spending and reducing unemployment through measures like job creation programs.

Related terms

Fiscal policy: Government decisions regarding taxation and spending aimed at influencing economic conditions.

Aggregate demand: The total amount of goods and services demanded by consumers, businesses, and governments within an economy.

Multiplier effect: The idea that an initial injection of spending (such as government spending) can lead to larger changes in overall economic output.