Which Statement Is Consistent with the Keynesian Theory

Multiple Choice

Which statement is consistent with the Keynesian theory?

A) Short-run economic fluctuations are caused by unstable aggregate demand; therefore, policy instruments should be used to stabilize the economy.
B) Irrational waves of optimism would cause a reduction in aggregate demand and decrease unemployment.
C) Changes in business and consumer expectations generally stabilize the economy.
D) Changes in consumer confidence are irrelevant for the economy.