AnswersMCS Economics BLEconomic Policy: Influential Theories

5.4 Economic Policy: Influential Theories Answers

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A government might enact expansionary spending when it is trying to

A
increase aggregate demand for goods.
B
decrease aggregate demand for goods.
C
slow an economic expansion.
D
lower a budget deficit.
2
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Friedrich Hayek believed that

A
behaviors could be easily predicted.
B
individuals could not influence the economy.
C
the economy is simply explained through behaviors.
D
the economy is too complicated to apply aggregates.
3

Milton Friedman led a new economic school of thought called

A
laissez faire.
B
monetarism.
C
price signaling.
D
the invisible hand.
4

John Maynard Keynes believed that governments should increase spending in order to

A
increase prices.
B
increase supply.
C
decrease demand.
D
increase demand.
6

Milton Friedman led a new economic school of thought called

A
laissez faire.
B
monetarism.
C
price signaling.
D
the invisible hand.
7

Which occurred during the Great Depression? Check all that apply.increased aggregate demandnew forms of moneyfalling wagesincreasing pricesplummeting growthsurging unemployment

A
increased aggregate demand
B
new forms of money
C
falling wages
D
increasing prices
E
plummeting growth
F
surging unemployment
8

How did Adam Smith’s economic ideas help the United States establish a free enterprise system? Check all that apply.

A
They led to freedom of choice for consumers and producers.
B
They led to fixed prices for consumers and producers.
C
They led to open competition for consumers.
D
They led to individual ownership of property.
E
They led to more government spending and increased demand.
F
They led to limited choice and communal ownership of property.
10

How did Adam Smith’s economic ideas help the United States establish a free enterprise system? Check all that apply.

A
They led to freedom of choice for consumers and producers.
B
They led to fixed prices for consumers and producers.
C
They led to open competition for consumers.
D
They led to individual ownership of property.
E
They led to more government spending and increased demand.
F
They led to limited choice and communal ownership of property.

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