#1
Which of the following is a key characteristic of Keynesian economics?
The government intervenes to stimulate demand.
ExplanationKeynesian economics advocates for government intervention to boost demand.
#2
Which of the following is a key assumption of Keynesian economics?
Aggregate demand determines output and employment.
ExplanationKeynesian economics asserts that total demand influences both production and employment levels.
#3
What is the 'Paradox of Thrift' according to Keynesian economics?
An increase in savings leads to a decrease in investment and consumption.
ExplanationSaving more can paradoxically reduce overall spending, causing economic downturns.
#4
Which of the following is a key component of Keynesian macroeconomic policy?
Increasing government spending during economic downturns.
ExplanationKeynesian policy involves boosting government spending to stimulate the economy in recessions.
#5
Which of the following is a criticism of Keynesian economics?
It relies too much on government intervention.
ExplanationCritics argue that Keynesian economics overly depends on government interference in markets.
#6
Which of the following is a primary focus of Keynesian economics?
Minimizing unemployment.
ExplanationKeynesian economics prioritizes reducing unemployment rates to stabilize the economy.