Multiple Choice
What is the difference between the classical approach and the Keynesian approach to fiscal policy?
A) Keynesians believe that natural forces in the economy tend toward full employment, whereas classical economists believe in government intervention.
B) Keynesians and classical economists believe that natural forces in the economy do NOT tend toward full employment.
C) Classical economists believe that the economy will NOT achieve its potential GDP, whereas Keynesians believe that any action of the government will make matters worse.
D) Keynesians believe that government action is needed to stimulate output and employment in order for the economy is to achieve its potential output, but classical economists believe that the economy's natural tendency is to full employment.
Correct Answer:

Verified
Correct Answer:
Verified
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