Economics MCQs

Page No. 333

The economists who emphasised wage flexibility as a solution for unemployment were ?


anew-Keynesian.

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bpost-Keynesian.

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cclassical economists.

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dKeynesian.

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View Answer classical economists.

A group of modern economists who believe that institutional factors and confidence strongly influence business behaviour and that expanding demand will usually increase output rather than prices are the ?


amonetarists.

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bkeynesians

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cpost-keynesians

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d new classical school

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View Answer post-keynesians

A group of modern economists who believe that markets clear very rapidly and that expanding the money supply will always increase prices rather than employment are the ?


aKeynesians

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b post-keynesians

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cmonetarists

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dnew classical school

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View Answer new classical school

New classical theories were an attempt to explain ?


a how unemployment could have persisted for so long during the Great Depression

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bThe increase in the growth rate of real output in the 1950s

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c the stagflation of the 1970s

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dWhy policy changes that are perceived as permanent have more of an impact on a person’s behaviour than policy changes that are viewed as temporary.

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If the demand for money depends on the interest rate the velocity of circulation is ?


anot constant and the quantity theory of money does hold.

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bconstant and the quantity theory of money does hold.

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cnot constant and the quantity theory of money does not hold.

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dconstant and the quantity theory of money does not hold.

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The persistence of a phenomenon such as unemployment, even then its causes have been removed is called ?


a the fallacy of composition

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bnegative entropy.

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chysteresis.

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dceteris paribus

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View Answer hysteresis.

The rational-expectation hypothesis suggests that the forecasts that people make concerning future inflation rates ?


aconsistently overestimate the actual rate of inflation in the future.

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bare always correct

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cconsistently underestimate the actual rate of inflation in the future

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dare correct on average, but are subject to errors that are distributed randomly

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Rapid increase in the price level during periods of recession of high unemployment are known as ?


aslump

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binflation

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cstagflation

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dstagnation

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View Answer stagflation

The government increase government spending to try to reduce unemployment This is an example of ?


a laissez-faire.

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b monetary policy

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cfine tuning

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dautomatic stablisers

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View Answer fine tuning

Keynesian economics became popular because it was able to explain ?


astagflation in the late 1970s

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bdemand-pull inflation in the 1960s

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clow growth rates in the 1950s

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dThe prolonged existence of high unemployment during the Great depression

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