According to John Maynard Keynes:
A) aggregate expenditures (demand) can be forever inadequate to achieve full employment.
B) aggregate output (supply) can be forever inadequate to achieve full employment.
C) the economy would automatically adjust to full employment in the long run.
D) neither aggregate demand nor aggregate supply is a determinant of full-employment real GDP.

Question

Quizplus · Accepted Answer

According to Keynes, aggregate expenditures (demand) can be forever inadequate to achieve full employment. This is because he believed that in a market economy, there can be times of insufficient demand, resulting in unemployment and underutilization of resources. He advocated for government intervention to increase demand through fiscal and monetary policies.