The Keynesian school of thought emphasizes the importance of: A. Laissez-faire economics B. Supply-side policies C. Aggregate demand and government intervention D. Comparative advantage
Question
The Keynesian school of thought emphasizes the importance of: A. Laissez-faire economics B. Supply-side policies C. Aggregate demand and government intervention D. Comparative advantage
Solution
The Keynesian school of thought emphasizes the importance of: C. Aggregate demand and government intervention. This economic theory suggests that government intervention is necessary to moderate the booms and busts in economic activity, through monetary and fiscal policies. It also emphasizes the importance of aggregate demand (the total demand for goods and services within the economy) in driving economic activity.
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The theory of Keynesian economics emphasizes the role of:Question 9Answera.Aggregate demand (AD) in driving economic activityb.Aggregate supply (AS) in determining price levelsc.Free markets and laissez-faire policiesd.Government regulation of international trade
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according to the analysis of the british economist john maynard keynesmarkets coordinate supply and demand so that a policy of laissez-faire would prevent recessions.economic fluctuations were the cumulative result of mistakes made by businesses and households in an uncertain world.government demand could be used to smooth fluctuations in aggregate output and income.supply creates its own demand through the circular flow of economic activity.
Laissez-faire economists advocate…
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