Keynes's theory is consistent with the idea of an economy that is producing _____ its production possibilities frontier.
A) on
B) inside
C) outside
D) to the right of

Question

Quizplus · Accepted Answer

Keynes's theory, particularly during periods of recession or depression, suggests that an economy can operate below its full capacity, meaning it is producing inside its production possibilities frontier. This is because of insufficient aggregate demand to stimulate full employment.

Keynes's Theory Is Consistent with the Idea of an Economy