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What do Keynesians mean when they say that "you can't push on a string"?
a. An increase in the supply of goods does not really create its own demand.
b. If the government reduces taxes in an attempt to increase household consumption, it will not always work.
c. An increase in the money supply will not always stimulate the economy.
d. If the government wants to get something done, the best way is not to force the issue, but to offer incentives.
e. If the government puts too much expansionary pressure on the economy, it will probably "overheat."

Respuesta :

TomShelby

Answer:

c. An increase in the money supply will not always stimulate the economy.

Explanation:

The central bank with a series of bad policies or with the intention to do it, it can slow down the economy or generate a recession by changing interest rates, money supply and other instrument.

But, it cannot stimulate "push" the ecnomy with the same instrument or measure it used to slow dowm (interest rate and money supply)

Thus, making the central bank ineffective to drive the economy out of a recesssion.

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