Why did Keynes believe that Fiscal Policy was more powerful/effective than Monetary Policy?

Expert Solution

According to Keynes believe that fiscal policy was more effective and power than monetary policy .The major reason for this considering major factors like employment and demand and output.
And also his point of view the period of recession the government should cut down the taxes and also increase the spending because of the need of economy recovery.
So here get the relevance of fiscal policies.
The short period more effect is powerful in the case of fiscal policy than monetary policy which is long term nature and that result got from that way.so The government spending,taxes etc are major factor in the economy.so As per the Keynes rule that fiscal policy is more effective in each time when the monetary policy is ineffective.

Rahul Sunny answered 2 years ago

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