ThatQuiz
|
Test Library
|
Take this test now
The General Theory of Employment, Interest and Money
  • 1. What is the 'liquidity preference' theory?
A) Desire to invest in stocks
B) Preference for real estate investment
C) Preference for foreign currency
D) Demand for money based on interest rates
  • 2. What does the term 'multiplier effect' refer to?
A) The impact of spending on national income
B) Interest rate changes
C) Inflationary pressures
D) The reduction of taxes
  • 3. In Keynesian economics, what role do expectations play?
A) They do not affect supply
B) They are irrelevant to the economy
C) They influence consumption and investment decisions
D) They are only relevant to financial markets
  • 4. What does Keynes propose regarding interest rates?
A) Lower interest rates to stimulate investment
B) Variable interest rates for risk management
C) Higher interest rates to control inflation
D) A fixed interest rate for all loans
  • 5. Which of the following is a critique of Keynesian economics?
A) It does not consider aggregate demand
B) It ignores the role of banks
C) It neglects long-term growth
D) It can lead to budget deficits
  • 6. What is 'animal spirits' according to Keynes?
A) Economic indicators
B) Government regulations
C) A type of consumer product
D) The instincts that drive investment decisions
  • 7. Keynes argued that during a liquidity trap, what should the government do?
A) Focus on inflation control
B) Increase fiscal spending
C) Decrease tax rates
D) Tighten monetary policy
  • 8. Keynes believes that the economy is predominantly driven by which factor?
A) Inflationary trends
B) Long-term supply growth
C) Government interventions
D) Aggregate demand fluctuations
Created with That Quiz — where test making and test taking are made easy for math and other subject areas.