If asked about the basic functioning of the economy,a Keynesian economist would state that
A) prices are flexible.
B) the market tends toward stability and full employment.
C) the market tends toward instability and cyclical unemployment.
D) savings is crucial to growth.
E) the long run is more important than the short run.

Question

Quizplus · Accepted Answer

Keynesian economists believe that the economy can experience periods of instability and cyclical unemployment, and that government intervention through fiscal policy (such as increasing government spending during a recession) is necessary to stabilize the economy and promote full employment. This is in contrast to classical economists who believe that the market is self-correcting and will tend towards full employment in the long run.

If Asked About the Basic Functioning of the Economy,a Keynesian