Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

Which statement would most likely be made by an economist in the Keynesian school?

  • AAny deviation from full employment will only be temporary.
  • BFree markets will always lead to an efficient economic outcome.
  • CMarket imperfections can lead the economy to remain below full capacity for a considerable time.
  • DThe role of expansionary fiscal policy is likely to be limited.

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