Keynesians a. advocate for a laissez-faire approach. b. believe that equilibrium may exist at less than full employment. c. believe in the use of fiscal policy to stabilize the economy. d. b and c e. all of the above

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Alexandra Hardy

Business

11 September, 18:01

Keynesians a. advocate for a laissez-faire approach. b. believe that equilibrium may exist at less than full employment. c. believe in the use of fiscal policy to stabilize the economy. d. b and c e. all of the above

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Natalie Conway · Answer 1

c. believe in the use of fiscal policy to stabilize the economy.

Explanation:

According to Keynesian theory, the sum of some micro-economic behaviors of all individuals and businesses results in inefficiency and the economy operates at a level below its potential output and growth. When total demand for products is insufficient, the economy enters a crisis and unnecessary unemployment arises due to defensive behavior of the producers. In such cases, the government may pursue policies to increase aggregate demand, and as a result may accelerate economic activities and reduce unemployment. Most Keynesian propose policies to stabilize the business cycle. For example, when the unemployment level is too high, the state can pursue a growth-oriented monetary policy., one of the most famous of his critiques, Keynes argues and did not agree with "The Laissez-faire" that he opined the doctrines of laissez-faire are dependent on some extent on a case-by-case basis.