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"While some economists argue that full employment can be restored if wages are allowed to fall to lower levels, Keynesians maintain that employers will not employ workers to produce goods that cannot be sold. Because they believe unemployment results from an insufficient demand for goods and services, Keynesianism is considered a "demand-side" theory that focuses on short-run economic fluctuations.Keynes argued that investment, which responds to variations in the interest rate and to expectations about the future, is the dynamic factor determining the level of economic activity. He also maintained that deliberate government action could foster full employment. Keynesian economists claim that the government can directly influence the demand for goods and services by altering tax policies and public expenditures." —Encyclopædia BritannicaJohn Maynard Keynes argued that the best way to lower unemployment is to a. increase demand for goods and services by cutting government costs. b. allow the market to set interest rates for loans to businesses. c. increase government spending in order to increase demand for goods and services. d. allow interest rates to increase in order to lower unemployment rates.
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