"Keynes believed that" a. Say's law would hold in a laissez-faire economy. b. The economy would always be near or on its production possibilities frontier. c. Wages and prices are often inflexible in the downward direction. d. The equilibrium level of output will always be at the full-employment level of output.
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Keynes believed that: c. Wages and prices are often inflexible in the downward direction.
He argued that wages and prices often struggle to adjust downwards in response to decreases in demand or economic downturns, leading to unemployment and economic inefficiency. This concept is a key aspect of Keynesian economics.