Economic Policy: Influential Theories — Quiz

Question 1

Friedrich Hayek believed that

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the economy is too complicated to apply aggregates.

Question 2

Milton Friedman led a new economic school of thought called

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monetarism.

Question 3

A government might enact expansionary spending when it is trying to

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increase aggregate demand for goods.

Question 4

Milton Friedman argued that consumers are more likely to alter their behavior based on

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long-term changes in the economy.

Question 5

Why did Friedrich Hayek call expansionary spending dangerous?

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He felt it could lead to inflation and poor decisions by consumers.

Question 6

Many classical economists such as Adam Smith believed that government should

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intervene little in the economy.

Question 7

Which economist most likely would have agreed with the US government’s intervention during an economic crisis in 2008?

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John Maynard Keynes

Question 8

The General Theory of Employment, Interest and Money was written by

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John Maynard Keynes.

Question 9

Monetarism plays a role in economic growth by

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influencing the supply of money.

Question 10

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

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increase demand.

Economic Policy: Influential Theories — Quiz Answers