Question 1

The 3 leakages from spending are

Accepted Answer

A)   savings, investment, and taxes.
B)   exports, imports, and government spending.
C)   savings, taxes, and imports.
D)   consumption, savings, and taxes.E) A) and B)
F) All of the above

Question 2

The name of John Maynard Keynes' most famous book is

Accepted Answer

A)   The General Theory of Employment, Interest and Money.
B)   The Causes of Unemployment and Depression.
C)   Principles of Macroeconomics.
D)   The Theory of Capitalism.E) A) and B)
F) None of the above

Question 3

Whats defention of terms:
-microeconomics

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The answer of Whats defention of terms:
-microeconomics...

Question 4

Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy.
-What are the two main things people can do with their income (money)?

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The answer of Describe Keynes's basic explanation of the boom...

Question 5

According to Say's law, a lack of demand

Accepted Answer

A)   may occur briefly in one industry until capital moves to another industry.
B)   will never occur in the aggregate economy for any reason.
C)   occurs whenever there is insufficient income to purchase goods produced.
D)   will occur frequently, because people tend to hoard money.E) All of the above
F) A) and D)

Question 6

Say's law was developed

Accepted Answer

A)   by John Maynard Keynes in 1926.
B)   by Adam Smith in 1789.
C)   by Jean Baptiste Say in 1800.
D)   by Thomas Say in 1825.E) A) and B)
F) A) and C)

Question 7

Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy.
-How does the use of money in the economy create the possibility that Say's Law may not hold?

Accepted Answer

The answer of Describe Keynes's basic explanation of the boom...

Question 8

Which of the following is a statement of Say's law?

Accepted Answer

A)   good money always drives out bad.
B)   capitalism must be reformed in order to preserve it.
C)   any output supplied to the market generates an equal amount of demand.
D)   an economy left alone will always return to equilibrium.E) None of the above
F) C) and D)

Question 9

Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy.
-How does income (money) "leak" out of circulation? In what way do savings enter back into circulation?

Accepted Answer

The answer of Describe Keynes's basic explanation of the boom...

Question 10

Explain how the government can act to stabilize the economy.
-How can the government offset a lack of private demand? How does this help prevent a recession?

Accepted Answer

The answer of Explain how the government can act to...

Question 11

Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy.
-What happens when there is not enough demand for the amount of goods produced?

Accepted Answer

Insufficient demand occurs if all of savings does not re enter circulation, and a recession may result

Question 12

Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy.
-State Say's Law and then explain what it means in your own words.

Accepted Answer

The answer of Describe Keynes's basic explanation of the boom...

Question 13

Keynes disagreed with the neoclassical view of money and argued that

Accepted Answer

A)   money is used only as a medium of exchange.
B)   money is neutral in its impact on the economy.
C)   money is used as a medium of exchange only in barter systems.
D)   money is used as a medium of exchange and also is used to keep in reserve for emergencies.E) B) and D)
F) C) and D)

Question 14

Income received by households will be used for

Accepted Answer

A)   consumption, saving, and investment.
B)   consumption, saving, and taxes.
C)   consumption, investment, and exports.
D)   consumption, investment, and transfers.E) None of the above
F) A) and C)

Question 15

Whats defention of terms:
-medium of exchange

Accepted Answer

The answer of Whats defention of terms:
-medium of exchange...

Question 16

Whats defention of terms:
-macroeconomics

Accepted Answer

The answer of Whats defention of terms:
-macroeconomics...

Question 17

Whats defention of terms:
-Say's law

Accepted Answer

The answer of Whats defention of terms:
-Say's law...

Question 18

The Great Depression occurred

Accepted Answer

A)   during the 1890s and lasted for 20 years.
B)   during the 1930s and last for 10 years.
C)   during the 1970s and lasted for 5 years
D)   during the 1990s and lasted for 1 year.E) B) and D)
F) A) and B) B

Question 19

Keynes divided spending into four great flows which are

Accepted Answer

A)   consumer spending on durable goods, consumer spending on nondurable goods, consumer spending on personal services, and consumer spending on financial services.
B)   business spending on buildings, business spending on equipment, business spending on raw materials, and business spending on advertising.
C)   consumer spending, business spending, government spending, and spending by foreign on exports.
D)   government spending on welfare, government spending on the military, government spending on education, and government spending on Social Security.E) A) and D)
F) B) and D) C

Question 20

Explain how the government can act to stabilize the economy.
-How could lower taxes, especially for middle and low-income households, help the economy?

Accepted Answer

The answer of Explain how the government can act to...

Exam 15: Keynesian Economics and the Great Depression

The 3 leakages from spending are

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The name of John Maynard Keynes' most famous book is

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Whats defention of terms: -microeconomics

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Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy. -What are the two main things people can do with their income (money)?

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According to Say's law, a lack of demand

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Say's law was developed

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Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy. -How does the use of money in the economy create the possibility that Say's Law may not hold?

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Which of the following is a statement of Say's law?

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Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy. -How does income (money) "leak" out of circulation? In what way do savings enter back into circulation?

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Explain how the government can act to stabilize the economy. -How can the government offset a lack of private demand? How does this help prevent a recession?

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Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy. -What happens when there is not enough demand for the amount of goods produced?

Correct AnswerverifiedInsufficient demand occurs if all of savings does not re enter circulation, and a recession may result

Describe Keynes's basic explanation of the boom and bust cycle of a capitalist market economy. -State Say's Law and then explain what it means in your own words.

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Keynes disagreed with the neoclassical view of money and argued that

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Income received by households will be used for

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Whats defention of terms: -medium of exchange

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Whats defention of terms: -macroeconomics

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Whats defention of terms: -Say's law

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The Great Depression occurred

Correct AnswerverifiedB

Keynes divided spending into four great flows which are

Correct AnswerverifiedC

Explain how the government can act to stabilize the economy. -How could lower taxes, especially for middle and low-income households, help the economy?

Correct AnswerverifiedShow Answer

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Insufficient demand occurs if all of savings does not re enter circulation, and a recession may result

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B

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C

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