Economic Policy: Influential Theories Answers
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What are the goals when a government uses expansionary monetary policy? Check all that apply.
A
increasing its money supply to boost the economyB
decreasing its money supply to slow the economyC
increasing its money supply to speed business expansionD
decreasing its money supply to curb business expansionE
decreasing its interest rates to increase investment spending2
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The graph shows an early economic theory known as the "invisible hand."
A
Producers decide what to make for consumers, which guides the economy.B
Individuals seeking their own self interest benefit the economy as a whole.C
Government sets policy for producers and consumers, which guides the economy.D
Consumers decide what they need and want to buy, which guides the economy.3
The graph shows how individuals affect economic growth.
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.4
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.5
Why did Friedrich Hayek call expansionary spending dangerous?
A
He felt it could lower the money supply and cause deflation.B
He felt it could lead to inflation and poor decisions by consumers.C
He felt it could lead to deflation and poor decisions by consumers.D
He felt it could lower available credit and cause a drop in prices.6
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A
producersB
consumersC
governmentD
prices7
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A
free enterpriseB
government regulationC
Keynesian economicsD
monetary policy8
The General Theory of Employment, Interest and Money was written by
A
John Maynard Keynes.B
Adam Smith.C
Milton Friedman.D
Friedrich August von Hayek.9
Which occurred during the Great Depression? Check all that apply.
A
increased aggregate demandB
new forms of moneyC
falling wagesD
increasing pricesE
plummeting growthF
surging unemployment10
Who was known as the "Father of Economics,” whose ideas of free markets inspired classical economic thinkers?
A
John KeynesB
Milton FriedmanC
Friedrich HayekD
Adam SmithDid you find these answers helpful?
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