After two decades of discredit, Keynes prescriptions for state intervention when free markets stum-ble have returned to dominate the national agenda. For example, any solution to the problem of federal budget deficits will probably involve raising tax revenues and also stimulating employment, the traditional Keynesian priority. Another of the economic blueprints calls for hiking income taxes while encouraging in-vestment through restored tax breaks for business. To offset higher taxes, neo-Keynesians revise the old remedy by lowering interest rates, spending less on public works and boosting productivity through the de-velopment and application of high technology. The urgent need, says Harvards Summers, is to bal-ance the federal budgets and create jobs.
Keynes also owes his comeback to an articulate group of young academics. Among the rising-star disciples are Harvard economist Jeffrey Sachs now knows as Father of the Shock Therapy, and MITs Alan Blinder, current economic advisor to President Bill Clinton. The traditional Keynesian reflex to re-duce unemployment merely by pumping up spending, says Alan Blinder, is gone forever. He aims at balancing the federal budget and raising investment primarily by increasing taxes. Sachs also argues that more than half of the deficit gap should be closed by tax increases. Both of them urge greater coordination among the G-7 on fiscal and monetary policy as the only way to head off a global recession.
36. What is the main subject of the topic?
B. The discredit of Keynesianism.
D. The retroboon of Keynesianism.
A. Slashing tax revenues.
C. Increasing taxes.
38. The word default as used in sentence 1, paragraph 2 is closest in meaning to________.
B. failure to pay debts
D. no competitors
A. Alan Blinder and Jeffrey Sachs
C. Jeffrey Sachs and Arthur Latter
40. According to the passage, what do the neo-Keynesians urge to prevent a world wide recession?
B. Dismantling tariff barriers.
D. Global investment credit for plant-and-equipment purchases
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