Answer:
The correct answer is letter "A": tax increases and decreased government spending.
Explanation:
Keynesian Economics is a school of thought where government plays a crucial role in reducing economic recessions. It is named after the British economist John Maynard Keynes (1883-1946) who proposed government intervention during the peak of the Great Depression (1929-1933). Keynes concluded that governments need to battle against economic waves to lessen the effect of the cycles of boom and bust that are inevitable in a free economy.
According to Keynesians, when unemployment and inflation hit the economy, a contractionary fiscal policy using tax increases or a decrease in government spending would lower the pressure on the price level reducing production in small quantities or rising employment moderately.
