According to the Keynesian framework, ____________ in _______________ may cause inflation, but not a recession. a. decrease; interest rates b. an increase; domestic spending c. a decrease; a major trading partner's economy d. a decrease; a mayor trading partner's export prices I believe the correct answer is the increase in domestic spending because it will cause inflation but will shift AD to the right. What do you think?

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter25: The Keynesian Perspective
Section: Chapter Questions
Problem 1SCQ: In the Keynesian framework, which of the following events might cause a recession? Which might cause...
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According to the Keynesian framework, ____________ in _______________ may cause inflation, but not a recession.  

a.  decrease; interest rates

b. an increase; domestic spending

c. a decrease; a major trading partner's economy

d. a decrease; a mayor trading partner's export prices

I believe the correct answer is the increase in domestic spending because it will cause inflation but will shift AD to the right.  What do you think?

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