According to Keynes, once a system attains an economy-wide equilibrium
A) there may or may not be excess productive capacity.
B) planned consumption will be zero.
C) planned investment will be zero.
D) the economy will be at full productive capacity.

Question

Quizplus · Accepted Answer

According to Keynes, achieving economy-wide equilibrium does not necessarily mean that the economy is operating at full productive capacity. There may still be excess productive capacity, meaning that firms are not producing at their full potential. Therefore, option A is the best choice. Option B and C are incorrect as they suggest that consumption and investment will be zero, which is not necessarily true in an equilibrium situation. Option D is incorrect as it incorrectly assumes that the economy will be at full productive capacity once equilibrium is achieved.

According to Keynes, Once a System Attains an Economy-Wide Equilibrium