Question

According to Keynesianism, as more

items are being made and prices are
rising, what is happening in the
economy?

A. The unemployment rate is rising.

B. Resources are being under-utilized.

C. The economy is in depression.

D. Resources are being fully-utilized.

Answer 1

Answer: But Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending—consumption, investment, or government expenditures—cause output to fluctuate. If government spending increases, for example, and all other components of spending remain constant, then output will increase.

Step-by-step explanation: