According to Keynesian theory,the natural forces in the economy may not quickly move the economy toward potential real GDP.

Question

Quizplus · Accepted Answer

Keynesian theory suggests that the market forces alone may not be able to achieve full employment and potential output in the short run. Hence, government intervention through fiscal policy is needed to stabilize the economy and bridge the gap between actual and potential output.

According to Keynesian Theory,the Natural Forces in the Economy May