Question

Choose the correct answer / answers:

A. The most important work of John Maynard Keynes has the title
a) 'broad lines of economics'.
b) "General Economic Policy".
c) "General theory of employment, interest and money".
d) "Capital".

B. John Maynard Keynes stressed
a) the possibility of a stable underemployment balance
b) the possibility of effective macroeconomic stabilisation policies.
c) the importance of demand management in economic policy.
d) the importance for the fight against unemployment of whether the government contracts companies to build houses or dig up old bottles.

C. Keynes saw as the most important economic policy objective
a) the reduction of inflation.
b) the reduction of unemployment.
c) the abolition of capitalism.
d) the consolidation of the budget.

D. To this end Keynes recommended above all the use of
a) monetary policy.
b) Fiscal policy.
c) Regulatory policy.
d) structural policy.

E. The government expenditure multiplier indicates
a) how government expenditure changes when taxes change
b) how government expenditure changes when there is a change in aggregate income.
c) how general government income changes when government expenditure changes.
d) how effective monetary policy is.

F. Full employment is an economic policy objective because high unemployment
a) causes a loss of production.
b) causes price increases.
c) causes a loss of income.
d) may cause social problems, thereby triggering radicalisation of policies.

G. Time lags in the impact of economic policy
a) are an argument for the active use of monetary policy
b) are an argument for the active use of fiscal policy.
c) are an argument against the active use of monetary policy.
d) are an argument against the active use of fiscal policy.

Answer 1

Q.A)

The answer is (c) General theory of employment, interest and money. This si the most important work of Keynes written in the mid 1930s that dominated the economic thought for the next 3 decades. None of the works mentioned in the other options is his work.

Q.B) The answer is (c) the importance of demand management in economic policy. Keynes advocated the use of demand-side economics for the stabilization of output. None of the other options were his stressed by him.

Q.C) The answer is (b) the reduction of unemployment. Unemployment was a major problem when Keynes was active and he tried to develop into the main economic objective. Rest of the options were not his amin policy objectives.

Q.D) The answer is (b) Fiscal policy. Keynes advocated for the use of government spending to control the economy and fight business cycles. Rest all options were not advoacted by him.