Which of the following economists, introduced fiscal policy as a tool to rectify the Great Depression of 1929-30?

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(a) Prof. Keynes — British economist John Maynard Keynes introduced fiscal policy as a tool to rectify the Great Depression of 1929-30. Keynes argued that inadequate overall demand could lead to prolonged periods of high unemployment. An economy’s output of goods and services is the sum of four components: consumption, investment, government purchases and net exports. Any increase in demand has to come from one of these four components. But during a recession, strong forces often dampen demand as spending goes down. This reduction in spending by consumers can result in less investment spending by businesses, as firms respond to weakened demand for their products. This puts the task of increasing output on the shoulders of the government. According to Keynesian economics, state intervention is necessary to moderate the booms and busts in economic activity, otherwise known as the business cycle.

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(B) Prof. Pigou

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(C) Prof. Marshall

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(D) Prof. Crowther

Which of the following economists, introduced fiscal policy as a tool to rectify the Great Depression of 1929-30?

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