Keynes Argued That Aggregate Demand Is

Multiple Choice

Keynes argued that aggregate demand is

A) stable, because the economy returns to long-run equilibrium.
B) stable, because changes in consumption are mostly offset by changes in investment and vice versa.
C) unstable, because waves of pessimism and optimism create fluctuations in aggregate demand.
D) unstable, because of long and variable policy lags that worsen economic fluctuations.