Pretest

Question 1

A government might enact expansionary spending when it is trying to

Revolt · Accepted Answer

increase aggregate demand for goods.

Question 2

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

Revolt · Accepted Answer

John Maynard Keynes

Question 3

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 4

Monetarism plays a role in economic growth by

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influencing the supply of money.

Question 5

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

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increase demand.

Question 6

Milton Friedman led a new economic school of thought called

Revolt · Accepted Answer

monetarism.

Question 7

Why did Friedrich Hayek call expansionary spending dangerous?

Revolt · Accepted Answer

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

Question 8

Many classical economists such as Adam Smith believed that government should

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intervene little in the economy.

Question 9

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

Revolt · Accepted Answer

John Maynard Keynes.

Question 10

Friedrich Hayek believed that

Revolt · Accepted Answer

the economy is too complicated to apply aggregates.

Pretest Answers