According to Keynes:
A) Small disturbances in prices and output are always short term.
B) The economy is inherently stable.
C) Government intervention in the economy is necessary at times.
D) High unemployment is always a temporary situation.

Question

Quizplus · Accepted Answer

Keynes believed that government intervention in the economy, specifically through fiscal policy, was necessary during times of economic downturns to stimulate demand and reduce unemployment. He argued that the economy was not inherently stable and small disturbances could lead to prolonged periods of unemployment and underutilization of resources.