Economic Policy: Influential Theories

Question 1

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

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increase demand.

Question 2

producersconsumersgovernmentprices

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prices

Question 3

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 4

free enterprisegovernment regulationKeynesian economicsmonetary policy

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free enterprise

Question 5

A government might enact expansionary spending when it is trying to

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increase aggregate demand for goods.

Question 6

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

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John Maynard Keynes.

Question 7

Which best summarizes the philosophical difference between economists John Maynard Keynes and Adam Smith?

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Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach.

Question 8

Friedrich Hayek believed that

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the economy is too complicated to apply aggregates.

Question 9

The graph shows how individuals affect economic growth.

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They work in their own self-interest.

Economic Policy: Influential Theories Answers