The General Theory of Employment, Interest, and Money was written by which economist?

• A. Paul Samuelson
• B. Adam Smith
• C. John Maynard Keynes
• D. Joseph Schumpeter

Answer: (C)

This question hinges on knowing who authored a foundational macroeconomics text that reshaped how economists think about employment and demand. The General Theory of Employment, Interest, and Money was written by John Maynard Keynes, a British economist. Published in 1936, it argued that the level of aggregate demand determines employment and output, and that economies can settle at less-than-full employment without automatic self-correction. Because incentives and policies influence demand, Keynes advocated active government action—such as fiscal stimulus and easier monetary policy—to lift demand and reduce unemployment. This work is the cornerstone of Keynesian economics, which marked a move away from the idea that markets naturally restore full employment on their own.

The other figures listed are notable for different contributions: Adam Smith laid the groundwork of classical economics long before Keynes; Joseph Schumpeter focused on entrepreneurship and cycles in capitalist economies; Paul Samuelson popularized and formalized many economic ideas in textbooks but did not write this particular treatise.