Practice Quiz

GED Test Prep - Social Studies

Category - GED Social Sciences

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The Council of Economic Advisors generally advocates that the government pursue goals in line with Keynesian economic theory, which advocates all of the following except:
  1. Increasing national production
  2. Maintaining price stability (or low inflation)
  3. Maintaining low unemployment rates
  4. Allowing the market to correct course naturally when it falters
Explanation
Answer: D - Neither the Council of Economic Advisors nor Keynesian economic theory encourage allowing a faltering market time to correct course naturally. Keynesian economic theory strongly advocates that government get involved in the marketplace to soften the blow of a recession or depression, as well as to encourage productivity. The CEA often promotes proactive government intervention to stave off similar disasters.
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