Which of the Following Statements Is True About Keynes' Macroeconomic

question 19

Multiple Choice

Which of the following statements is true about Keynes' macroeconomic theory?

• A) Keynes agreed that the notion that the economy would achieve the potential level of output in the long run is crucial to explaining prolonged recessions.
• B) Keynes dismissed the notion that the economy would achieve full employment in the long run as irrelevant in explaining prolonged recessions.
• C) Keynes stressed the notion that the economy would achieve price stability in the long run only if expansionary fiscal and monetary policies were used to address recessions.
• D) Keynes argued that the economy would achieve full employment in the long run because of wage and price flexibility.