Which of the Following Policy Statements Would a Keynesian Economist

question 91

Multiple Choice

Which of the following policy statements would a Keynesian economist tend to support?

• A) The government should encourage savings as a means of promoting economic growth.
• B) The government should never intervene in the economy.
• C) The government should intervene in the economy to promote full employment.
• D) The government should intervene in the economy only when aggregate supply changes.
• E) The government should focus on long-run aggregate supply,not aggregate demand.

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Definitions:

Bowed Inward

Describing a curve, specifically in the context of an economics graph, that concaves towards the origin, indicating increasing returns or efficiency.

Upward Sloping

refers to a graph line that shows an increase in one variable as another variable increases, commonly seen in supply curves.

Budget Constraint

An economic model that represents all the combinations of goods and services a consumer can afford given their income and prices.

Opportunity Cost

The value of the best alternative forgone as a result of choosing a particular action or decision.