"The Market Is Not a Self-Regulating Mechanism Because Prices Are

question 2

Multiple Choice

"The market is not a self-regulating mechanism because prices are not flexible and nothing ensures that planned leakages will be offset by planned injections. To bring the economy out of depression and end high unemployment, some way of stimulating aggregate demand is required. This can be best achieved by a combination of government deficit spending and regulation of tax rates." Which school of thought does this statement best represent?

• A) Utopian economics
• B) Monetarist economics
• C) Classical economics
• D) Keynesian economics
• E) Marxist economics

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