The main conclusion of Keynesian economics is:
A) a free market economy will automatically operate at full employment.
B) a free market economy can operate at less than full employment for long periods of time.
C) there is no tradeoff between inflation and unemployment.
D) there is no need for government intervention in the economy.

Question

Quizplus · Accepted Answer

Keynesian economics posits that a free market economy can indeed experience prolonged periods of underemployment or unemployment due to insufficient demand, and it suggests that government intervention, through fiscal and monetary policies, can help adjust demand levels and bring the economy back to full employment.

The Main Conclusion of Keynesian Economics Is