Keynesian Economics
📈 Investing
Quick Definition
Keynesian Economics is a theory of total spending in the economy (aggregate demand) and its effects on output and inflation, developed by the economist John Maynard Keynes.
Examples
- 1During a recession, a government might increase spending on infrastructure projects to boost employment and demand.
- 2A central bank might lower interest rates to encourage more borrowing and investment.
- 3During economic downturns, governments may run budget deficits to stimulate the economy, a practice supported by Keynesian theory.
Tags
economicsKeynesgovernment policymacroeconomicsfiscal stimulus
Related Terms
Other terms you might find helpful
Economic Growth
Economic growth refers to the increase in the production of economic goods and services, compared from one period of time to another.
Fiscal Policy
Fiscal policy refers to the government's use of spending and taxation to influence the economy.
Inflation
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
Monetary Policy
Monetary policy refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals.
Quick Info
Category:Investing
Difficulty:intermediate
Last Updated:6/19/2025