In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain a.short-run economic fluctuations. b.stagflation. c.how changes in the money supply had created the Great Depression. d.the classical dichotomy.

Keynes believed that the economies with high unemployment rate should adopt those policies which boost aggregate demand in the economy. Thus, Keynes favoured for expansionary fiscal policy for the stimulation of economic growth.In the book, “The General Theory,” Keynes attempted to explain how short-run economic fluctuations such as a change in money supply, change in wage rate, or change in price level change the overall output production in an economy.Thus, the correct option is (a). The rest of the three options (stagflation, classical dichotomy, and great depression) are not covered in the book “The General Theory.” Hence, Options (b), (c) and (d) are incorrect.Hence, the correct option is (a).

Answered: In 1936, John Maynard Keynes published…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

	a.	short-run economic fluctuations.
	b.	stagflation.
	c.	how changes in the money supply had created the Great Depression.
	d.	the classical dichotomy.

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