Which of the following arguments was NOT given in Up for Debate: Should Government's Role in Influencing Economic Activity be Reduced?
A) Classical and new classical economics point out that if the economy is left alone it will tend to operate at full employment.
B) Both new classical and new Keynesian economics tend to favor a large, interventionist government role in the macroeconomy.
C) Sometimes government needs to provide the "kick" that is needed to move an economy away from stagnation.
D) The movement of wages and prices, without government intervention, should lead to adjustments needed to reach full or natural employment.

Question

Quizplus · Accepted Answer

The correct answer is B because both new classical and new Keynesian economics have different views on government intervention. New classical economics generally advocates for minimal government intervention, arguing that markets are efficient and self-correcting, while new Keynesian economics supports some level of government intervention to correct market failures and stabilize the economy. Therefore, it is not accurate to say that both tend to favor a large, interventionist government role in the macroeconomy.

Which of the Following Arguments Was NOT Given in Up