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Questions and Answers
According to the text, what is the central tenet of Keynesian economics?
According to the text, what is the central tenet of Keynesian economics?
- Aggregate supply is the most important driving force in an economy
- Free markets automatically provide full employment
- Inadequate overall demand leads to decreased government intervention
- Government intervention can stabilize the economy (correct)
What did John Maynard Keynes assert as the most important driving force in an economy?
What did John Maynard Keynes assert as the most important driving force in an economy?
- Household savings
- Aggregate demand (correct)
- Aggregate supply
- Government spending
What did existing economic theory fail to provide during the Great Depression?
What did existing economic theory fail to provide during the Great Depression?
- Support for government intervention in stabilizing the economy
- Explanation of the causes of the severe worldwide economic collapse
- Adequate public policy solution to jump-start production and employment (correct)
- Recognition of the importance of money in the economy
What did Keynesian economists justify government intervention for?
What did Keynesian economists justify government intervention for?
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According to Keynes, what could lead to prolonged periods of high unemployment?
According to Keynes, what could lead to prolonged periods of high unemployment?
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