Asked by Jeremy Dyzenhaus on May 06, 2024
Verified
Keynes believed in all of the following EXCEPT,
A) the expected rate of profit was more important than the interest rate.
B) recessions are temporary.
C) expansionary government spending and tax cuts are cures for recessions and depressions.
D) in the short run,aggregate demand should be manipulated to stabilize the economy.
Expected Rate Of Profit
The anticipated return on an investment, considering potential risks and rewards.
Recessions
Periods of economic decline lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
Government Spending
Expenditures by the government sector including spending on goods and services, public works, social services, and transfer payments.
- Examine the significance of governmental measures in correcting economic discrepancies in light of Keynesian theory.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
B
Explanation :
Keynes did not believe that recessions are merely temporary phenomena that resolve on their own. Instead, he argued that without intervention, economies can remain in a depressed state for a prolonged period. His theories advocate for active government measures to manage economic cycles, suggesting that recessions require external intervention to be effectively addressed.
Learning Objectives
- Examine the significance of governmental measures in correcting economic discrepancies in light of Keynesian theory.