Answer :
Answer:
increase its expenditure and reduce tax rates
Explanation:
John Maynard Keynes in his book 'The General Theory of Employment, Interest and Money' of 1936 has elaborated a numbers of economic measures and steps which have greatly attributed in establishing many modern economic policies. His theory, also known as Keynesian Theory, is still studied by many modern economists because of its relevance in macroeconomics.
According to John Maynard Keynes' General Theory of Employment, Interest and Money, the government should increase its expenditure and reduce tax rates in order to get an economy out of a depression. The Keynesian theory believes in governmental expansionary policies. The government should increase consumers demands by generating employment and reducing tax rates. The theory believes that increase in consumers demand will raise the economy out of misery.
The Keynesian theory was adopted by President Franklin D. to counter the Great Depression in the U.S in 1930's. Roosevelt increased government expenditure and debt to implement his New Deal program to generate employment and undergo major economic reforms.