Keynes argued that
A)irrational waves of pessimism cause decreases in aggregate demand and increases in unemployment.
B)irrational waves of optimism cause decreases in aggregate demand and decreases in aggregate supply.
C)changes in business and consumer expectations generally stabilize the economy.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Keynes argued that irrational waves of pessimism cause decreases in aggregate demand and increases in unemployment. This is a key tenet of his theory of macroeconomics, which asserts that fluctuations in aggregate demand play a significant role in economic growth and stability.

Keynes Argued That