1. Until the Great Depression of the 1930\'s, the dominant school of economic th
ID: 1184953 • Letter: 1
Question
1. Until the Great Depression of the 1930's, the dominant school of economic thought was ______________.
a) classical economics
b) Keynesian economics
c) supply side economics
d) neo classical economics
e) monetarism
2. When graphing the Keynesian Consumption Function, the curve that equates Aggregate Disposable Income (Yd) and Expenditures (C) is referred to as
a) the 45 degree reference line
b) the line of equation
c) the equality line
d) all of the above are correct
e) none of the above are correct
3. Say's law states that ___________________________.
a) we can have an inflation or a recession, but never both at the same time
b) the normal state of economic affairs is recession
c) demand creates its own supply
d) supply creates its own demand
e) none of the above is a correct statement of Say's law
4. Autonomous consumption expenditures are
a) equal to induced consumption expenditures
b) proportional to aggregate disposable income
c) not influenced by or related to aggregate disposable income
d) influenced mainly by the savings function
5. That a free market economy is always tending toward full employment is a belief of ______________.
a) Keynes
b) the classical economists
c) the supply-siders
d) the monetarists
e) all economists believe this
6. According to Keynes, our economy always tends toward ______________________.
a) recession equilibrium
b) inflationary equilibrium
c) full employment equilibrium
d) some equilibrium level
e) Keynes did not address this
7. With which of the following was Keynes mainly concerned?
a) the aggregate supply side of economics
b) the aggregate demand side of economics
c) the interest rate
d) inflation
e) preserving the gold standard
8. The minimum amount that people will spend even if disposable income is zero is called ____________ consumption.
a) autonomous
b) automatic
c) fixed
d) induced
e) total
9. Which of the following programs would Keynes probably NOT recommend?
a) the "New Deal" programs initiated by President Franklin D. Roosevelt
b) the one-trillion dollar Japanese public works program of the 1990's
c) letting the forces of supply and demand bring the economy to a full employment equilibrium
d) empowering the federal reserve to employ monetary policy tools to stimulate or restrain the economy
e) empowering the president and congress to employ fiscal policy tools of federal spending or taxation to stimulate or restrain the economy
10. As disposable income rises, ___________________.
a) autonomous C rises
b) autonomous C falls
c) automatic C rises
d) induced C rises
Explanation / Answer
answers:
1) -b )
2)--c)
3)-d)
4)-b)
5)-a)
6)-c)
7)-a)
8)-b)
9)-e)
10)-a)
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