00:02
Hi, so we are to select the correct statement that relates to the analysis of the british economist john maynard keynes.
00:12
So first statement says that markets coordinate supply and demand so that a policy of lazy fare would prevent recessions.
00:22
So this statement is actually more aligned with classical economic theory and net keynesian.
00:28
So keynes actually argued that markets do not always self -adjust and.
00:32
Sometimes need government intervention to achieve full employment and stable prices.
00:37
So this option is incorrect.
00:43
Second statement, supply creates its own demand through a circular flow of economic activity.
00:48
So this statement is a simplification of seiz law, which is often associated with classical economics and not keynesian.
00:56
So this is incorrect as well.
00:59
So keynes actually challenged this idea, arguing that the demand could fall short of supply leading to economic downturns...
