CHAPTER 15
Keynesian Economics and the Great Depression
MULTIPLE CHOICE
100.
a. The General Theory of Employment, Interest and Money.
b. The Causes of Unemployment and Depression.
c. Principles of Macroeconomics.
d. The Theory of Capitalism.
101.
a. by John Maynard Keynes in 1926.
b. by Adam Smith in 1789.
c. by Jean Baptiste Say in 1800.
d. by Thomas Say in 1825.
102.
a. may occur briefly in one industry until capital moves to another industry.
b. will never occur in the aggregate economy for any reason.
c. occurs whenever there is insufficient income to purchase goods produced.
d. will occur frequently, because people tend to hoard money.
103. What is the difference between microeconomics and macroeconomics?
a. microeconomics deals with the economy with a country; macroeconomics deals with the
global economy.
b. microeconomics deals with small firms; macroeconomics deals with large firms.
c. microeconomics deals with individual firms, consumers, etc; macroeconomics deals with
the economy as a whole.
d. microeconomics deals with small countries; macroeconomics deals with large countries.
104.
a. good money always drives out bad.
b. capitalism must be reformed in order to preserve it.
c. any output supplied to the market generates an equal amount of demand.
d. an economy left alone will always return to equilibrium.
105. Keynes divided spending into four great flows which are
a. consumer spending on durable goods, consumer spending on nondurable goods,
consumer spending on personal services, and consumer spending on financial services.
b. business spending on buildings, business spending on equipment, business spending on
raw materials, and business spending on advertising.
c. consumer spending, business spending, government spending, and spending by foreign
on exports.
d. government spending on welfare, government spending on the military, government
spending on education, and government spending on Social Security.
106. Income received by households will be used for
a. consumption, saving, and investment.
b. consumption, saving, and taxes.
c. consumption, investment, and exports.
d. consumption, investment, and transfers.
107. The 3 leakages from spending are
a. savings, investment, and taxes.
b. exports, imports, and government spending.
c. savings, taxes, and imports.
d. consumption, savings, and taxes.
108. The Great Depression occurred
a. during the 1890s and lasted for 20 years.
b. during the 1930s and last for 10 years.
c. during the 1970s and lasted for 5 years
d. during the 1990s and lasted for 1 year.
109. Keynes disagreed with the neoclassical view of money and argued that
a. money is used only as a medium of exchange.
b. money is neutral in its impact on the economy.
c. money is used as a medium of exchange only in barter systems.
d. money is used as a medium of exchange and also is used to keep in reserve for
emergencies.