Which of These Is a Central Argument of Keynes's General

question 50

Multiple Choice

Which of these is a central argument of Keynes's General Theory?

• A)Competition does not allocate resources efficiently in a modern industrial economy.
• B)Full employment can be maintained even during a major recession if wage rates are lowered far enough.
• C)Modern industrial economies do not tend automatically toward full employment rates of output.
• D)Money does not play an important role in either causing or curing recession.
• E)Government can best stabilize the economy by letting the market system automatically adjust toward full employment.

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Definitions:

Public Ownership

The state or condition where assets are owned by the government or a public entity, rather than by private individuals or companies.

Antitrust Laws

Legislation enacted to prevent new monopolies from forming and police those that already exist to protect consumers from predatory business practices.

Fair Return Price

A pricing concept where the price of a good or service is set to allow the provider to cover costs and earn a reasonable profit, often associated with regulated industries.

Socially Optimal Price

The pricing point where the societal benefits of consuming a good or service equal the societal costs of providing it, leading to an efficient allocation of resources.