Keynes believed budget deficits were (LO4) a) to be avoided at all costs b) bad during recessions c) good during recessions d) good all the time

John Maynard Keynes was an influential British economist who founded Keynesian economics. His ideas had a significant impact on modern economic theories and government policies. Keynes believed that in the short run, especially during recessions, economic output is strongly influenced by aggregate demand – the total demand for goods and services in the economy. To counter recessions and unemployment, he advocated for government intervention and spending to stimulate aggregate demand.

A budget deficit occurs when a government's expenditures exceed its revenues during a specific period. According to Keynesian economics, a government can use budget deficits to stimulate aggregate demand and promote economic growth during recessions by increasing public spending or reducing taxes.

Now that we understand the basic ideas of Keynesian economics and budget deficits, let's analyze the options given in the exercise. a) to be avoided at all costs: This does not represent Keynes's view, as he believed in using budget deficits as a policy tool during recessions. b) bad during recessions: This is also incorrect, as Keynes advocated for using budget deficits to stimulate economic growth during recessions. c) good during recessions: This option aligns with Keynes's views, as he believed budget deficits could help stimulate aggregate demand and economic growth in recessions. d) good all the time: This option is incorrect. While Keynes thought budget deficits were helpful during recessions, he did not advocate for constant budget deficits.

Based on our understanding of Keynesian economics and the analysis of the given options, the correct answer is: c) good during recessions.