"The market is not a self-regulating mechanism because prices are not flexible and nothing ensures that planned leakages will be offset by planned injections. To bring the economy out of depression and end high unemployment, some way of stimulating aggregate demand is required. This can be best achieved by a combination of government deficit spending and regulation of tax rates." Which school of thought does this statement best represent?
A) Utopian economics
B) Monetarist economics
C) Classical economics
D) Keynesian economics
E) Marxist economics

Question

Quizplus · Accepted Answer

This statement best represents the Keynesian school of thought, which emphasizes the need for government intervention in the economy, particularly during times of recession or depression, to stimulate aggregate demand and reduce unemployment. Keynesian economics views the market as not being self-regulating and advocates for government deficit spending and regulation of tax rates to achieve this goal.

"The Market Is Not a Self-Regulating Mechanism Because Prices Are