The correct answer is (d).
Deflation is a decrease in the general price level of goods and services. It can be caused by a number of factors, including a decrease in the money supply, a decrease in aggregate demand, or an increase in aggregate supply.
Deflation can have a number of negative effects on the economy. It can lead to a decrease in investment, as businesses are less likely to invest in new projects when they expect prices to fall. It can also lead to a decrease in consumer spending, as people are less likely to spend money when they expect prices to fall in the future. This can lead to a decrease in economic output and an increase in unemployment.
John Maynard Keynes was a British economist who is considered one of the most influential economists of the 20th century. He is best known for his work on macroeconomics, which is the study of the economy as a whole. Keynes argued that deflation was a serious problem that could lead to a recession or even a depression. He believed that the government should take steps to prevent deflation, such as increasing the money supply or spending more money on public works projects.
(a) Is uncontrolled: This is not the reason why Keynes called deflation a “disease.” Deflation can be controlled by the government, through monetary policy or fiscal policy.
(b) Is not a problem for Government: This is also not the reason why Keynes called deflation a “disease.” Deflation can be a serious problem for the government, as it can lead to a decrease in tax revenue and an increase in government spending.
(c) Decreases foreign trade: This is a possible effect of deflation, but it is not the main reason why Keynes called deflation a “disease.” Deflation can lead to a decrease in foreign trade, as countries with falling prices are less competitive in international markets.
(d) Increases unemployment: This is the main reason why Keynes called deflation a “disease.” Deflation can lead to a decrease in investment and consumer spending, which can lead to a decrease in economic output and an increase in unemployment.