Keynes argued that

Question

Keynes argued that

Quizplus · Accepted Answer

Keynes argued that monopolistic elements in the economy and sticky wages and prices would prevent an immediate sharp fall in prices as a result of decreasing demand. This is because, in the short run, businesses may maintain prices to protect their profit margins, and employees may resist wage cuts. As a result, the economy may experience a period of low demand and high unemployment, known as a recession. Keynes suggested that during such times, governments could intervene to stimulate demand and boost employment, such as through increased government spending or tax cuts.

Keynes Argued That