Which of the following was a central argument of Keynes's General Theory?
A) Competition does NOT allocate resources efficiently in a modern industrial economy.
B) Full employment can be maintained even during a major recession if wage rates are lowered far enough.
C) Modern industrial economies do NOT tend automatically toward full employment rates of output.
D) Government can best stabilize the economy by letting the market system automatically adjust toward full employment.

Question

Which of the following was a central argument of Keynes's General Theory?  
A) Competition does NOT allocate resources efficiently in a modern industrial economy. 
B) Full employment can be maintained even during a major recession if wage rates are lowered far enough. 
C) Modern industrial economies do NOT tend automatically toward full employment rates of output. 
D) Government can best stabilize the economy by letting the market system automatically adjust toward full employment.

Quizplus · Accepted Answer

Keynes argued that modern industrial economies do not tend automatically toward full employment rates of output and that government intervention is required to stabilize the economy. He advocated for the use of fiscal and monetary policies to encourage spending during economic downturns and increase employment. This was a central argument of his General Theory.

Which of the Following Was a Central Argument of Keynes's