Asked by Michael Swihart on Jun 07, 2024
Verified
Statement I: The classical economists believed recessions were temporary and would cure themselves.
Statement II: The Keynesians believed the economy was basically unstable and that government intervention was needed to cure depressions.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Classical Economists
Economists from the 18th and 19th centuries who focused on free markets, supply and demand, and the idea of self-regulating economies.
Keynesians
Economists and followers of the economic theories of John Maynard Keynes, focusing on government intervention to mitigate the adverse effects of economic recessions.
Government Intervention
Involves actions taken by a government to affect the economy, typically through regulations, subsidies, tariffs, or monetary policies.
- Note the dissimilarities and resemblances among classical economists, Keynesians, and monetarists in their tactics for achieving economic stability and growth.
- Apprehend the ideas and influences of Keynes in the context of economic recessions and the importance of government mediation.
Verified Answer
HM
Hannah McGaunnJun 07, 2024
Final Answer :
C
Explanation :
Classical economists indeed thought that markets were self-correcting and that recessions would naturally correct themselves over time. Keynesians, on the other hand, believed that the economy could remain in a depressed state for a long time without government intervention, thus advocating for active fiscal and monetary policies to mitigate economic downturns.
Learning Objectives
- Note the dissimilarities and resemblances among classical economists, Keynesians, and monetarists in their tactics for achieving economic stability and growth.
- Apprehend the ideas and influences of Keynes in the context of economic recessions and the importance of government mediation.