SIE Exam Question 324: Answer and Explanation

Question: 324

The theory that says the economy is best controlled through taxation and government spending is known as

• A. Monetarist economic theory.
• B. Classical economic theory.
• C. Keynesian economic theory.
• D. Open market operations.

Correct Answer: C

Explanation:

C - This is the framework behind Keynesian economic theory, founded by John Maynard Keynes in the 1930's.