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Economic Policy: Influential Theories Answers

10 verified answers
1
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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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Milton Friedman argued that consumers are more likely to alter their behavior based on

A
changes in the unemployment rate.
B
short-term changes in the economy.
C
long-term changes in the economy.
D
changes in the inflation rate.
4

Monetarism plays a role in economic growth by

A
expanding government intervention.
B
influencing the supply of goods.
C
expanding government spending.
D
influencing the supply of money.
5

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
6

The graph shows Keynes's theory of aggregate demand.

Question illustration
A
Prices and output would drop, and the equilibrium point will stay the same.
B
Prices would rise, and output would drop in the short run.
C
Prices and output would rise, and the equilibrium point will change.
D
Prices would rise, and output would drop in the long run.
7

Milton Friedman led a new economic school of thought called

A
laissez faire.
B
monetarism.
C
price signaling.
D
the invisible hand.
8

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

A
increase prices.
B
increase supply.
C
decrease demand.
D
increase demand.
9

The graph shows how individuals affect economic growth.

Question illustration
A
They work in their own self-interest.
B
They work as part of a unified group.
C
They work to influence the money supply.
D
They work to influence the economy.
10

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.

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