One of Keynes' most profound insights was that
A) markets allocate resources efficiently, as if by an invisible hand
B) comparative advantage allows all nations to gain from trade
C) capitalists exploit workers by paying them less than the total value of what they produce
D) the same factor that drives long run growth-technological change-also causes business cycles
E) the economy can achieve an equilibrium below its capacity

Question

Quizplus · Accepted Answer

Keynes introduced the concept that economies can settle into a stable equilibrium even when they are not operating at full capacity, leading to persistent unemployment and underutilized resources. This insight challenged the classical view that markets always clear and economies naturally operate at full employment.

One of Keynes' Most Profound Insights Was That