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John Maynard Keynes Shocked the Economic World with His Theory

Question 62

Multiple Choice

John Maynard Keynes shocked the economic world with his theory that the Great Depression could continue in a never-ending downward spiral unless government intervened.According to Keynes,the reason the economy could NOT pull itself out of the Depression was that


A) the government continued to insist on high tax rates.
B) price controls precluded business expansion.
C) we no longer had a balanced budget.
D) the lack of income had reduced aggregate demand.
E) wages and prices were much too flexible.

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