Keynesian economists argue that
A) equilibrium real GDP is demand-determined.
B) equilibrium real GDP is supply-determined.
C) equilibrium real GDP can be reached only in a theoretical economy.
D) reaching equilibrium real GDP always results in inflation.

Question

Quizplus · Accepted Answer

Keynesian economists argue that equilibrium real GDP is demand-determined, meaning that it is primarily influenced by aggregate demand in the economy. This is in contrast to the classical theory of economics, which argues that equilibrium is supply-determined. Keynesians believe that government intervention is necessary to maintain full employment and stabilize the economy, while classical economists favor minimal government involvement.

Keynesian Economists Argue That