Keynesians believe that
A) a change in business confidence can affect the amount of investment in the economy.
B) money wage rate adjustments will quickly eliminate unemployment.
C) aggregate demand changes tend to induce aggregate supply changes, offsetting any effect from changes in government expenditures.
D) the economy will normally operate at full employment.

Question

Quizplus · Accepted Answer

Keynesians believe that changes in business confidence can affect investment, as investment is a key component of aggregate demand. This is because businesses may become hesitant to invest in new projects if they are uncertain about future economic conditions.

Keynesians Believe That