1) To determine the correct level of GNP (Gross national product), it is necessary to: (A) Add up the values of goods and services during one year (B) Add up all savings (C) Count all imports (D) Add up the value of semi-finished goods. Post-Keynesian economics (PKE) is an economic paradigm that stems from the work of economists such as John Maynard Keynes (1883-1946), Michal Kalecki (1899-1970), Roy Harrod (1900-1978), Joan Robinson (1903-1983), Nicholas Kaldor (1908-1986), and many others. All students preparing for mock exams, other assessments and the summer exams for A-Level Economics. Chapter 10. Chapter 15. The perfectly elastic shape of the Keynesian AS curve shows the existence of excess capacity allowing real GDP to expand through increases in aggregate demand without there being inflation. The Keynesian Theory states that an increase in production leads to an increase in the level of income and therefore, an increase in spending. Multiple Choice Questions, M.B.B U, Semester –III Pass 1. Chapter 11. A. Keynesian Theory. Prior to Keynes, economists generally believed that the invisible hand of the market can direct the economy to its full potential. The present MCQ’s are very helpful in understanding the various terminologies used in the relevant chapters of course books of economics. Two sector model B. (b) a decline in the real money supply, a decline in interest rates, an increase in investment } Keynesian Theory. This question looks at the effects of an outward shift of aggregate demand using the Keynesian aggregate supply curve model. 4Ibid 70. B. B) why the Great Depression occurred. color: #000!important; Multiple Choice Questions. } Classical economics places little emphasis on the use of fiscal policy to manage aggregate demand. Keynesian economics is a macroeconomic economic theory of total spending in the economy and its effects on output, employment, and inflation. 2Ibid xxi. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';fnames[1]='SUBJECT';ftypes[1]='radio';}(jQuery));var $mcj = jQuery.noConflict(true); “I’m just so grateful without your site I would have crumbled this year” 7) Actual investment spending is comprised of two components: 8) In the Keynesian framework, as long as output is _____ the equilibrium level, unplanned inventory investment will remain _____ and firms will continue to raise production. 1951-52 C. 1931-32 D. 1990-91 2. View Answer. D) all of the above since computers are consumer durables. #mc_embed_signup input#mce-EMAIL { #mc_embed_signup{background:#292929!important; clear:left; } 9) In the Keynesian framework, as long as output is below the equilibrium level, unplanned inventory investment will remain negative, firms will continue to _____ production, and output will continue to _____. The theory of economics called Keynesian Economics, or Keynesianism, is named after the British economist John Maynard Keynes. }

D) decrease by an amount less than the change in investment spending. C. the economy to grow at a rapid rate during the 1950s. B) his primary focus was on output and employment. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences. C) the change in the money supply to a change in the autonomous expenditure. This means that every $1 of new income will generate $2 of extra income. Government borrowing is cheap but not without risks, How migration could make the world grow richer, Poor management cited as a key supply-side weakness for the UK. ADVERTISEMENTS: (ii) Bounding (iv) David Ricardo. MCQ Questions for Class 12 Economics with Answers were prepared based on the latest exam pattern. B) Keynes recognized that equilibrium would occur in the economy when total quantity of output supplied (aggregate output produced, Y) equals quantity of output demanded (Y. In the Keynesian economic model, total spending determines all economic outcomes, from production to employment rate. Chapter 08. Structural unemployment is a feature in a – (a) Static society (b) Socialist society (c) Dynamic society (d) Mixed … B) the change in the money supply to a change in the monetary base. View Answer. 3Galbraith (2010) 63. #mc_embed_signup option { C) unplanned investment and inventory investment. D) fixed business investment and fixed housing investment. Keynesian Economic Theory is an economic school of thought that broadly states that government intervention is needed to help economies emerge out of recession. Perfect Competition. He has over twenty years experience as Head of Economics at leading schools. We have provided Determination of Income and Employment Class 12 Economics MCQs Questions with Answers to help students … 11 Macroeconomic theory that emphasised the theories of Keynes and de-emphasised the Classical theory developed as the result of the failure of A. economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s. Keynes's General Theory tops ranking of most influential scholarly books, Eighty Years on from the General Theory - Keynes Returns, Google's £1bn Investment in the UK Economy, 70th Anniversary of the death of John Maynard Keynes, Multiplier Effect - Revision and Practice Questions, AQA A-Level Economics Study Companion - Macroeconomics, Edexcel A-Level Economics Study Companion for Theme 4, Advertise your teaching jobs with tutor2u. Keynes lived from 1883 – 1946, and was considered “the greatest and most influential economist of the 20th century.” (Kangas, 1996). The Keynesian perspective focuses on aggregate demand. C) the high unemployment in Great Britain before World War I. It is so called because money plays on active role in it. Question 1.

#mc_embed_signup select { Keynesian economics gets its name, theories, and prin- ciples from British economist John Maynard Keynes (1883–1946), who is regarded as the founder of modern macroeconomics. Multiple Choice Test: Aggregate Demand in the Keynesian System 1) Keynes’s motivation in developing the aggregate output determination model stemmed from his concern with explaining A) the hyperinflations of the 1920s. Multiple Choice Test: Aggregate Demand in the Keynesian System, 1) Keynes’s motivation in developing the aggregate output determination model stemmed from his concern with explaining. The first National Income calculation on a scientific basis in India is in the year A. color: #000!important; D) consumer expenditure, planned investment spending, government spending, and net exports. 14) The Keynesian analysis of aggregate demand indicates that a decline in the price level causes (a) a decline in the real money supply, an increase in interest rates, a decline in investment spending, and a decline in aggregate output demanded. 6 Aggregate Demand (Keynesian Model) This exercise is based on the following source: Stephen Dobson and Susan Palfreman: Introduction to Economics, Oxford University Press, Oxford / New York 1999, ISBN 978-0-19-877565-2, pp.

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