Which of the following statements is false?
A)Keynesians,like classicals,believe that people's expectations are formed based on the rational expectations hypothesis.
B)Keynesians,like classicals,recognize the effect of productivity shocks on the business cycles.
C)Keynesians,like classicals,believe that the free market is able to respond quickly and efficiently to the aggregate demand shocks.
D)Keynesians,unlike classicals,believe that aggregate demand shocks are the main source of the business cycles.

Question

Quizplus · Accepted Answer

Keynesians do not generally believe that the free market is able to respond quickly and efficiently to aggregate demand shocks. They advocate for government intervention, such as fiscal stimulus programs, to mitigate the negative effects of economic downturns.

Which of the Following Statements Is False