Conservatives and Keynesians differ on the appropriate response of the government to a recession. Which of the following is a true statement?
A) Conservatives believe the economy will not recover from an outside shock without government assistance.
B) Conservatives believe the economy will automatically adjust to an outside shock.
C) Conservatives believe there is no such thing as an outside shock.
D) Conservatives believe that governments can prevent an outside shock.

Question

Quizplus · Accepted Answer

Conservatives believe in the concept of market self-correction and that the economy will eventually adjust to any outside shock without the need for government intervention. They emphasize that government intervention can actually hinder the natural adjustment process and lead to further economic imbalances. Therefore, they typically advocate for limited government involvement during a recession.

Conservatives and Keynesians Differ on the Appropriate Response of the Government