Unlike the classical economists,Keynes asserted that
A)The economy was inherently unstable.
B)Laissez faire policies would lead to macro equilibrium.
C)Prices and wages were flexible.
D)Markets would naturally self-adjust.

Question

Quizplus · Accepted Answer

Keynes believed that the economy was inherently unstable and prone to fluctuations due to changes in aggregate demand. He argued that government intervention was necessary to stabilize the economy through fiscal and monetary policies. This is in contrast to classical economists who believed that markets would naturally self-adjust to maintain macro equilibrium. Keynes also rejected the notion of flexible prices and wages, suggesting that they were inflexible in the short run and could contribute to economic instability.

Unlike the Classical Economists,Keynes Asserted That