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Brief description: Keynesians recommend active intervention in the economy to manage the level of demand. Deflationary policies reduce the level of aggregate demand.

Detailed description: Because Keynesians believe that the economy can settle at an equilibrium at any level of output, they recommend the use of active intervention to manage demand. If demand is too high they would recommend deflationary policies to shift aggregate demand to the left as in this diagram. Deflationary policies could include reducing government expenditure, increasing tax rates or increasing interest rates.