The Great Depression provided support for Keynes' view that
A) government action was necessary to ensure interest rates remained at the equilibrium level.
B) prolonged periods of unemployment would be present when demand is deficient.
C) falling resource prices would bring the economy out of a recession.
D) lower interest rates would quickly restore the full employment equilibrium of an economy.

Question

Quizplus · Accepted Answer

The Great Depression was characterized by prolonged periods of high unemployment due to deficient demand. This supported Keynes' view that government action was necessary to stimulate demand and bring the economy back to full employment.

The Great Depression Provided Support for Keynes' View That