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Keynesian Economists Believe That Savings Is a Drain on Demand

Question 125

Multiple Choice

Keynesian economists believe that savings is a drain on demand because


A) when a recession occurs,households tend to spend less,which only worsens the recession.
B) prices are flexible and allow the economy to quickly return to full employment.
C) the economy is stable and tends toward full employment.
D) government intervention in the economy is unnecessary.
E) the short run is more important than the long run,and economic policy only works in the short run.

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