Which of the following is a difference between John Maynard Keynes and the classical economists?
a. Keynes did not believe that unemployment was a serious long-term problem; the classical economists did. b. Keynes did not believe that the economy was always in equilibrium; the classical economists did. c. Keynes did not believe that the economy necessarily settled at full employment; the classical economists did. d. Keynes believed that the economy was always in equilibrium; the classical economists did not. e. Keynes believed that a general glut of output was a good thing for the economy; the classical economists believed a glut created an unemployment problem for the economy.
1 Answer | Add Yours
The best answer here is C.
The main claim of classical economists is that the economy is self-correcting. If there comes to be too much unemployment or too much inflation, the economy will fix itself without any need for government intervention. This means that the classical economists believe that the economy settles at an equilibrium with full employment while Keynes believes that the economy can get stuck well below full employment and will need government intervention to get it back to full employment. This is why Keynes is seen as an advocate of government intervention while classical economists believe in laissez-faire.
We’ve answered 317,881 questions. We can answer yours, too.Ask a question