As a result of the Great Depression, a view that become very widespread among economists and others in the 1940s and 1950s was that:
the government should avoid interfering with the economic system and thus prevent another depression. the business cycle was uncontrollable. the market was inherently unstable, and thus needed a large dose of government guidance. wage-price controls were an effective way to deal with inflation.
The Keynesian multiplier model implies that the source of instability in the economy is in:
financial markets. the market for money balances. markets for goods and services. resource markets.