ECONOMICS
ECONOMIC SYSTEMS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Government intervention in the economy was necessary for stability of the economy.
|
|
|
Government should not control the money supply.
|
|
|
Command economies are best for society.
|
|
|
The government should not be involved. The economy should operate in a laissez-faire manner.
|
Detailed explanation-1: -It was developed by British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. The central belief of Keynesian economics is that government intervention can stabilize the economy.
Detailed explanation-2: -Keynes argued that governments should solve problems in the short run rather than wait for market forces to fix things over the long run, because, as he wrote, “In the long run, we are all dead.” This does not mean that Keynesians advocate adjusting policies every few months to keep the economy at full employment.
Detailed explanation-3: -Keynesian economics is a theory that says the government should increase demand to boost growth. 1 Keynesians believe that consumer demand is the primary driving force in an economy. As a result, the theory supports the expansionary fiscal policy.
Detailed explanation-4: -Keynesian Economic Theory is an economic school of thought that broadly states that government intervention is needed to help economies emerge out of recession.