Keynes and the classical economics would agree that ___

Keynes and the classical economics would agree that ___

a. our economy is always at equilibrium or tending toward equilibrium
b. our economy is never at or tending toward equilibrium
c. the prime mover of our economy is aggregate supply
d. the prime mover of our economy is aggregate demand

Answer: A

If we are operating in the classical range of the aggregate supply curve and aggregate demand rose, then___

If we are operating in the classical range of the aggregate supply curve and aggregate demand rose, then___

a. output would rise and the price level would remain the same
b. output would remain the same and the price level would rise
c. output would rise and the price level would rise
d. output would remain the same and the price level would remain the same





Answer: B

Which of the following is the most accurate statement about meeting our current economic needs?

Which of the following is the most accurate statement about meeting our current economic needs?

a. John Maynard Keynes, rather than Jean baptiste Say, is providing the economic answers we need.
b. Say, rather than Keynes, is providing the economic answers we need.
c. Neither Keynes nor say is providing the economic answers we need
d. together, Keynes and Say are providing the economic answers we need.

Answer: C

Which of the following anti recession programs would not be one that John Maynard Keynes would have prescribed?

Which of the following anti recession programs would not be one that John Maynard Keynes would have prescribed? 

a. the New Deal under President Franklin Roosevelt
b. the one trillion dollar Japanese public works program of the 1990s
c. Letting the forces of supply and demand allow the economy to reattain full employment
d. burying bottles containing bank notes

Answer: C

The slope of the aggregate demand curve is explained by each of the following except____

The slope of the aggregate demand curve is explained by each of the following except____

a. the real balance effect
b. the interest rate effect
c. the foreign purchases effect
d. the profit effect

Answer: D

As the price level rises, ___

As the price level rises, ___

a. the quantity of goods and services demanded falls
b. the quantity of goods and services demanded rises
c. the quantity of goods and services demanded stays the same
d. none of the above is correct

Answer: A

When the economy is in disequilibrium, ___

When the economy is in disequilibrium, ___

a. production automatically rises
b. production automatically falls
c. it automatically moves back into equilibrium
d. it stays in disequilibrium permanently

Answer: C

When aggregate demand is greater than aggregate supply, _____.

When aggregate demand is greater than aggregate supply, _____. 

a. inventories get depleted and output rises
b. inventories get depleted and output falls
c. inventories rise and output rises
d. inventories rise and output falls

Answer: A

Keynes was concerned mainly with ___

Keynes was concerned mainly with ___

a. aggregate supply
b. aggregate demand
c. the interest rate
d. inflation

Answer: B

Keynes considered full employment GDP to be ___

Keynes considered full employment GDP to be ___

a. the normal state of economic affairs
b. a rare occurrence
c. an impossibility
d. none of these

Answer: B

When saving is greater than investment, we are ___

When saving is greater than investment, we are ___

a. at equilibrium GDP
b. at full employment GDP
c. below equilibrium GDP
d. above equilibrium GDP

Answer: D

According to Keynes, our economy always tends toward___

According to Keynes, our economy always tends toward___

a. equilibrium GDP
b. full employment GDP
c. recessions
d. inflations

Answer: A

Which statement best describes the classical theory of employment?

Which statement best describes the classical theory of employment?

a. we will always have a great deal of unemployment
b. We will usually have a great deal of unemployment
c. We will occasionally have some unemployment, but our economy will automatically move back toward full employment
d. We never have any unemployment

Answer: C

To end a bad recession, we need to ___

To end a bad recession, we need to ___

a. go to war
b. spend a lot of money
c. balance the federal budget

Answer: B

The classical economists' aggregate supply curve is vertical____

The classical economists' aggregate supply curve is vertical____

a. both in the short run and in the long run
b. in neither the short run nor the long run
c. in the short run, but not in the long run
d. in the long run, but not in the short run

Answer: D

John Maynard Keynes is most closely associated with the ___

John Maynard Keynes is most closely associated with the ___

a.American Revolution
b. French Revolution
c. Great Depression
d.Russian Revolution

Answer: C

Keynes said___

Keynes said___

a. the expected profit rate was more important than the interest rate
b. the interest rate was more important than the expected profit rate
c. the expected profit rate and the interest rate were equally important
d. neither the expected profit rate nor the interest rate was important.

Answer: A

That we are always tending toward full employment is a belief of____

That we are always tending toward full employment is a belief of____

a. Keynes
b. the classicals
c. both Keynes and the classicals
d. neither Keynes nor the classicals

Answer: B

Our economy is definitely at equilibrium in each case except when___

Our economy is definitely at equilibrium in each case except when___

a. saving equals investment
b. aggregate demand equals aggregate supply
c. the amount people are willing to spend equals the amount that producers are producing
d. equilibrium GDP equals full employment GDP

Answer: C

Each of the following supports the classical theory of employment except___

Each of the following supports the classical theory of employment except___

a.Say's law
b.wage price flexibility
c. the interest mechanism
d. government spending programs

Answer: D