Under the Keynesian system, government intervention in an economy would NOT be required:
A) at any time.
B) when the economy is at full employment.
C) when the economy is operating above full employment.
D) when the economy is operating below full employment.

Question

Quizplus · Accepted Answer

Keynesian economics suggests that government intervention is necessary to manage demand and smooth out the cycles of economic boom and bust. However, when an economy is at full employment, it is operating efficiently, and Keynesian theory would not see a need for government intervention to stimulate or contract demand.

Under the Keynesian System, Government Intervention in an Economy Would