What is the primary focus of Keynesian economic theory?

Keynesian economic theory primarily focuses on the need for government intervention in the economy, particularly during periods of economic downturns. This approach recognizes that markets are not always self-regulating and can experience prolonged periods of unemployment and stagnation.

John Maynard Keynes, the founder of this theory, argued that during times of recession, consumer demand tends to decrease, leading to lower production and higher unemployment. To counter this, he advocated for active government policies to stimulate demand through fiscal measures such as increased public spending and tax cuts. By injecting money into the economy, the government can help increase demand, create jobs, and ultimately encourage private sector investment.

This perspective contrasts with classical economics, which emphasizes long-term growth and the belief that markets will typically find equilibrium without government interference. Therefore, the emphasis on government intervention is the hallmark of Keynesian economics, making this choice the most accurate representation of its primary focus.