Chapter 11 Say\'s law A was a basic pillar of classical economics. s. was a basi

Question

Chapter 11 Say's law A was a basic pillar of classical economics. s. was a basic pillar of Keynesian economics c. was formulated during the Great Depression. D. proves that we can never have full employment 2. Which question did John Maynard Keynes pose for the classical economists? A. What if their policies led to inflation? B. What if savings and investment were not equal? C. What if government intervention did not cure a recession? D. John Maynard Keynes posed none of these questions 3. Our economy is always tending towards full employment according to A. John Maynard Keynes B. the classical economists. C. both Keynes and the classicals. D. neither Keynes nor the classicals. 4. At equilibrium GDP A. Savings investment, but aggregate demand does not equal aggregate supply. B. Savings-investment and aggregate demand-aggregate supply. C. Savings does not equal investment and aggregate demand does not equal aggregate supply. D. Savings does not equal investment, but aggregate demand aggregate supply. 5. Which statement is true? A. Both Keynes and the classicals believed that equilibrium GDP and full employment GDP are equal. B. Neither Keynes nor the classicals believed that equilibrium GDP and full employment GDP are equal. C. Keynes believed that equilibrium GDP and full employment GDP are equal, but the classicals did not. D. The classicals believed that equilibrium GDP and full employment GDP are equal, but Keynes did not

Explanation / Answer

5) D. Acc. To classical economy is always at full employment level whereas keynes said it to be myth.

4)B. At equilibrium S=I and AD=AS

3)B. Acc to classical equilibrium always move towards full employment level

2)D. Keynes said economy is demand driven not supply driven

1)A. Says law states that supply creates its own demand and is basic assumption of classical economics

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