According to the Stagnation school of Marxist economics the slow economic growth

Question

According to the Stagnation school of Marxist economics the slow economic growth and high unemployment we see today is typical of modern corporate capitalism where: (a) workers cannot afford to buy all that they make because of exploitation. (b) there is a shortage of profitable investments as compared to the large profits generated by giant corporations, leading to less investment spending. (c) there is not enough money to finance investment because the Federal Reserve is following a monetarist policy and is too afraid of inflation. (d) conservative economic policies based on Say’s Law have restricted the use of fiscal policies that could stimulate the economy.

Explanation / Answer

Option (a).

The Marxist School blames the exploitation of workers by the capitalists, as a result of which the workers are deprived of sufficient income which would enable them to purchase enough goods and services. This results in slow growth and stagnation.

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