According to the Keynesian view, capitalism
A) is a highly productive form of economic organization that works best when government intervention is least.
B) experiences booms and busts because of the instability of private investment that is driven by fickle changes in business optimism.
C) experiences booms and busts that are primarily the result of inappropriate monetary policy.
D) experiences fluctuations in aggregate demand that cannot be controlled with fiscal policy.

Question

Quizplus · Accepted Answer

Keynesian economics posits that capitalism is prone to cycles of booms and busts due to the instability of private investment, which is influenced by changes in business confidence and optimism.

According to the Keynesian View, Capitalism