Question

Keynes was writing in response to the Great Depression which occurred from 1919 to 1929.

a) True
b) False

Answer 1

Keynes argued that the Great Depression and recessions were caused by a lack of demand, not a lack of supply.

Step-by-step explanation:

During the Great Depression, the economy's capacity to supply goods and services did not change significantly. Unemployment rates soared, but the number of workers and available machinery remained relatively stable. Keynes argued that the Depression and other recessions were not caused by a lack of supply, but rather a lack of demand. He believed that the level of GDP in the economy was primarily determined by the amount of total demand, not the potential supply.