Keynes Argued That Aggregate Demand Is

question 37

Multiple Choice

Keynes argued that aggregate demand is

• A)stable, because the economy returns to long-run equilibrium.
• B)stable, because changes in consumption are mostly offset by changes in investment and vice versa.
• C)unstable, because waves of pessimism and optimism create fluctuations in aggregate demand.
• D)unstable, because of long and variable policy lags that worsen economic fluctuations.

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